Trump’s Oil Foil

Shortly after returning to Washington from the G7 summit in Canada, President Donald Trump called for "a real end, not a ceasefire" in the escalating tensions between Israel and Iran. "I'm not looking for a ceasefire; we're looking for better than a ceasefire… a complete give-up (of Iran's nuclear program)," he stated.

For four years, President Trump pursued a two-pronged strategy in the Middle East, particularly concerning Iran. First, he was unequivocally opposed to Iran acquiring a nuclear weapon. This foundational belief led him to withdraw the United States from the Joint Comprehensive Plan of Action (JCPOA)—a deal struck by the Obama administration that unfroze billions in Iranian assets and lifted sanctions in exchange for temporary nuclear limits. Trump viewed the deal as appeasement, one that empowered Iran rather than neutralized the threat.

The second strategic pillar of Trump's policy was his vision for a prosperous, peaceful Middle East no longer mired in endless conflict. The region, he believed, had for too long been a battleground—either ignited by Western intervention or defined by reactions to it. His vision was for the Middle East to become a thriving economic zone driven by commerce, infrastructure, and innovation, free of warfare.

These two goals—preventing nuclear proliferation and promoting economic vitality—form the bedrock of Trump's geopolitical strategy, and even his harshest critics can acknowledge their merit. This vision has played a quiet but pivotal role in cushioning global oil markets amid severe geopolitical shocks, following Israel’s deep-penetrating air raids that reportedly eliminated high-ranking members of Iran's military hierarchy. In response, Iran unleashed a barrage of missiles and drones at Israel.

Under normal circumstances, such events would have triggered panic in global oil markets. Historically, armed conflict in the Middle East—especially involving major oil-producing nations—has driven Brent crude prices soaring, sometimes to crisis levels. Yet, as missiles flew and the specter of regional war loomed, oil prices remained surprisingly stable. How?

The answer lies in Trump's quiet, strategic oil diplomacy. While the media was preoccupied with tariffs and trade wars, two crucial developments that underscored this diplomacy's effectiveness unfolded.

First, the Trump administration imposed a fresh round of sanctions on Iranian oil exports in April and targeted Chinese companies that were still purchasing Iranian crude through complex, sanction-evading networks. The goal was to limit Iranian revenues through the oil trade––funds that could be used to accelerate its nuclear program.

Though Iran is no longer the oil powerhouse it once was, it remains an important supplier. At full capacity, Iran can produce nearly 4 million barrels of oil per day in a world market that consumes approximately 100 million barrels daily. Even disruptions of a few hundred thousand barrels per day—due to a refinery fire, for example—can send Brent prices soaring. By cracking down on Iran's already limited exports, the Trump administration signaled strength and a tightening of global supply, yet also assured allies that supply disruptions would be met with alternative sources, which was the second development the media ignored.

Also in April, several OPEC+ nations, led by Saudi Arabia, quietly agreed to boost oil production to stabilize prices. Critics framed this as a political favor to Trump ahead of his planned Middle East visit. While it's true that Trump favors low oil prices to curb inflation—a policy beneficial to American consumers and businesses—this was not mere flattery. Gulf nations, while diversifying into sectors like finance, tourism, and technology, still rely heavily on oil revenues to fund domestic programs and maintain social stability. Saudi Arabia, for instance, requires oil prices above $100 a barrel to meet its fiscal obligations fully. So why would these nations agree to increase output?

The answer is twofold: geopolitical calculus and financial confidence. These nations can borrow at low interest rates and use their vast untapped reserves as collateral to continue to spend on expensive cradle-to-grave programs to which their citizens are accustomed. When Trump visited Riyadh, the Saudis committed to further increasing production by approximately 411,000 barrels per day. (Contrast this with President Biden's 2022 trip to Saudi Arabia, which resulted in a diplomatic snub and a production cut shortly after his departure.)

Oil markets are relatively calm today, not by luck but by design, in the form of Trump's oil diplomacy in the Middle East. For nearly two months before Iran's retaliatory missile attack, markets had already priced in increased production estimates from OPEC nations. This foreknowledge prevented the usual chaos that follows the prospect of a war in the Gulf. Even after hostilities escalated, prices hovered around $75 a barrel—a modest increase, reflecting typical market tension rather than panic.

This strategic cushioning of oil prices may be remembered as a masterstroke in Trump's foreign policy. Of course, the situation remains fluid. If the United States declines to assist Israel in taking out Iran's underground nuclear facilities—an option popular with the MAGA base—the war could grind on, with daily armed exchanges and loss of lives that pull in neighboring countries sympathetic to Iran. Should those allies be oil producers who cut supply in protest, prices could surge.

A more dangerous scenario would be Iran closing the Strait of Hormuz, the narrow waterway connecting the Persian Gulf to the Arabian Sea through which nearly 20% of global oil flows. If Iran were to obstruct tanker traffic through the Strait militarily, oil prices could soar past $100 per barrel overnight, plunging fragile economies into recession and shocking the global financial system. Such a move would provoke a worldwide crisis and almost certainly trigger a U.S.-led military response. The Pentagon has already deployed a carrier strike group to the Arabian Sea, signaling preparedness for exactly this contingency.

But for now, none of that has happened. Much of the credit goes to President Trump's forward-looking oil diplomacy, which helped isolate Iran, encouraged allied production increases, and kept global markets stable amid what could have been a full-blown war.

1. Israel’s War Of Grand Ambition—Shlomo Ben-Ami, Project Syndicate

2. The Silence Of The Bears—Alastair Crooke, Ron Paul Institute for Peace and Prosperity

3. Can The Tyranny Be Soft-Landed?— Jeffrey A. Tucker, Ron Paul Institute for Peace and Prosperity

4. Boeing’s Tryst With Trust—Editorial Board, TIPP Insights

5. FBI Admits What Its Fmr Director Wouldn’t Say About Biden’s Afghanistan Withdrawal—Jason Hopkins, DCNF

6. 10 YEARS AGO: Media Mocked Trump’s Presidential Run Announcement—George Caldwell, The Daily Signal

7. The Dutch Model Of Secession, Commercial Freedom, And Religious Tolerance—Ralph Raico, Mises Wire

8. No, Leftists — Rioters Don’t Deserve Land Acknowledgements—Natalie Sandoval, DCNF

9. ‘I’m Willing To Admit I Was Wrong’: Steve Moore Says Trump’s Supply-Side Strategy Works—Mariane Angela, DCNF

10. ‘Look At That Shift!’: CNN’s Harry Enten Blown Away By Surge In Immigrant Support For Trump—Nicole Silverio, DCNF

11. Air Force Loses Appetite For Shiny Fighter Jet With Huge Price Tag—Wallace White, DCNF

12. Another Aging Democrat Plunges Her Party Into Chaos—Mary Rooke, DCNF

13. Myanmar: The Tragedy Of Socialism And Military Dictatorship—Hein Htet Kyaw, Mises Wire

14. The Weaponization Of Media Access Did Not Suddenly Start with Trump—Connor O'Keeffe, Mises Wire

15. Ready Or Not, Humanoid Robots Are Here To Stay—Duggan Flanakin, CFACT

16. How Marxists Erase Human Will And Agency—Wanjiru Njoya, Mises Wire

17. Ron DeSantis Reveals Newsom Turned Down Florida’s Help, And The Reason Given Is A Real Head-Scratcher—Mariane Angela, DCNF

18. Student Loan Reform Is Underway – Now The Senate Can Strengthen It—Madison Marino Doan, The Daily Signal 

19. The ‘Californication’ Of Virginia’s Power Grid Brings Increased Costs, Less Reliability—Joe Thomas, The Daily Signal

20. Greta Thunberg Should ‘Go to An Anger Management Class,’ Trump Says—Virginia Allen, The Daily Signal

21. ‘Law Enforcement Needs All the Support’ We Can Give Them, Thune Says of Troops Sent To LA—Jacob Adams, The Daily Signal

22. Brad Lander Held By ICE, Accused Of Impeding Officers—TIPP Staff, TIPP Insights

23. Brad Lander Arrest 'Political Intimidation', Says AOC—TIPP Staff, TIPP Insights

24. Mike Huckabee: Trump Chosen For This Moment—TIPP Staff, TIPP Insights

25. Trump May Act To Stop Iran's Uranium Enrichment, Says J.D. Vance—TIPP Staff, TIPP Insights

26. Europe Pushes Full Ban On Russian Energy—TIPP Staff, TIPP Insights

27. Iran Needs To Surrender, Trump Says Patience ‘Wearing Thin’—TIPP Staff, TIPP Insights

28. Trump Says U.S. Has ‘Total Control’ Of Skies Over Iran—TIPP Staff, TIPP Insights

29. Damage To Key Iranian Sites From Israeli Strikes—TIPP Staff, TIPP Insights

30. Iranian And Israeli Civilian Casualties Rise—TIPP Staff, TIPP Insights

31. Bernie Sanders Backs Mamdani In NYC Mayoral Showdown—TIPP Staff, TIPP Insights

32. Trump: Iran Knows Where to Find Me—TIPP Staff, TIPP Insights

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🧠 Macro Insight

● Futures tick up
Dow +0.2%, Nasdaq +0.3%, S&P +0.3% as investors eye Fed decision and Iran-Israel conflict.

● Oil retreats
WTI ($73.02) and Brent ($76.20) are down 0.3% after Tuesday's 4% surge. Israel strikes Tehran-area nuclear sites.

● Fed decision ahead
Rates are expected to hold. Dot plot update and hawkish tone likely as oil spike offsets tame inflation.

● Senate passes stablecoin bill
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● Bank regulators to ease capital rule
Fed, FDIC, and OCC may lower the leverage ratio of the biggest U.S. banks from 5% to 3.5–4.5%.

📅 Key Events Today

Wednesday, June 18
● 08:30 AM ET – Initial Jobless Claims
Weekly snapshot of labor market health.
● 10:30 AM ET – Crude Oil Inventories
Tracks weekly supply changes; impacts energy prices.
● 02:00 PM ET – FOMC Economic Projections
Fed outlook on GDP, inflation, and employment.
● 02:00 PM ET – Fed Interest Rate Decision
Markets expect no change; the current rate is 4.50%.
● 02:30 PM ET – FOMC Press Conference
Chair’s remarks offer clues on the timing of future moves.