Bloomberg: Third Week of US-Iran War, Trump "Using Feeling to Decide Next Steps," Strait of Hormuz Props Up Global Oil Market

The third week of the US-Iran conflict, the Hormuz Strait is nearly closed, oil prices have surged past $100 per barrel, and the IEA describes this as potentially the largest supply disruption in the history of the global oil market; the timing of ending this war, according to Trump himself, is based on his “gut feeling.”
(Background: Trump states Iran must “unconditionally surrender” to cease fire! Middle East escalation drives oil and dollar soaring, Bitcoin dips below $68,000)
(Additional context: After crude oil prices jumped 9%, Trump intervened! Navy escorts in Hormuz + DFC war risks, BTC reverses and surpasses $71,000)

Table of Contents

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• The Math Problem of Hormuz
• The Endgame Question: No One Has the Answer
• Chain Reaction in Financial Markets: Oil Prices, Inflation, Safe Havens

As the third week of the US-Iran war begins, the global oil market is waiting for someone to tell it “when supply will return to normal” based on their “gut feeling.”

According to Bloomberg, Trump said in an interview with Fox News that he will declare the war over when he “feels it in his gut.” For market participants accustomed to decision-making based on Fed dot plots and CPI data, this statement offers almost no certainty.

The Math Problem of Hormuz

Currently, the Strait of Hormuz is nearly closed, and about one-fifth of the world’s oil supply passes through this waterway. Oil prices have broken above $100 per barrel, and US retail gasoline prices have risen about 65 cents per gallon since the conflict began. The IEA’s wording is unambiguous: this could be the largest supply disruption in the history of the global oil market.

Notably, the US deliberately avoided destroying Iran’s oil export infrastructure when bombing Hark Island, indicating that the White House is not entirely unaware of the interconnected damage to energy markets. The issue is that “not destroying facilities” and “allowing oil to continue flowing” are separated by the Hormuz Strait and the Iranian Navy.

The Endgame Question: No One Has the Answer

During a G7 call, European leaders asked about the plan for ending the conflict. Trump replied, “We can’t discuss that on the phone.” The White House publicly states that military operations will continue for 4 to 6 weeks, and are “ahead of schedule.” Trump’s AI czar David Sacks publicly called for “declaring victory and then withdrawing,” a statement that in Washington’s political culture is rarely made by a single person.

Vice President JD Vance’s stance is “neither support nor oppose,” while Senator Lindsey Graham hinted at possible deployment of ground troops, with Marine forces already moved to the region. These signals are not entirely consistent.

Iran’s logic is relatively clear: Supreme Leader Khamenei said, “We will seek compensation,” and Iran’s strategy is not to defeat the US militarily—“lasting through it” is considered a victory. Oman, Saudi Arabia, and Turkey are exploring de-escalation channels, but European officials believe Iran’s two core demands—war reparations and guarantees of no further attacks—are structurally unacceptable to the US.

The Gulf states are also in a tricky position: they complain that the US did not consult sufficiently before the war, and large investment commitments have not translated into real influence over the war’s direction.

Chain Reaction in Financial Markets: Oil Prices, Inflation, Safe Havens

Every $10 increase in oil prices roughly raises US CPI by 0.2 to 0.3 percentage points, depending on how long the effect lasts. With the Fed already considering “improving inflation data” as a precondition for rate cuts, persistently high energy prices are delaying the rate cut timeline.

The reaction of safe-haven assets is textbook: gold benefits from geopolitical uncertainty; Bitcoin’s situation is more complex. When the main narrative is “inflation rising + Fed hawkish + dollar strengthening,” risk assets are usually under pressure. But as the US is a net energy exporter, rising oil prices no longer solely hurt the dollar—this structural change over the past decade is why some analysts believe the dollar might even strengthen.

Bitcoin’s positioning in this framework depends on whether the market classifies it as a “safe haven” or a “risk asset,” and recent data over the past two years show periods supporting both views, depending on the dominant macro narrative at the time.

Currently, with oil above $100, the war’s end uncertain, rate cut expectations delayed, and the dollar relatively strong, this combination clearly exerts short-term pressure on the crypto market. But the duration entirely depends on when Trump’s “gut feeling” changes.

Markets are always right—until they encounter week seven when they price in “ahead of schedule” for 4 to 6 weeks.