A Greater Conflict Between the US and Iran – Accelerating Forward

At the end of March, on the last trading day, Trump handed the market a big gift early in the morning—do you believe it?
Trump’s remarks are not really about stepping back; they are a clear objective reset. When he realizes that physical reality (a Strait blockade) can’t be resolved within the planned timeframe, what he’s best at is changing the definition of “victory.”
Trump’s previous 15-point plan was just a dead plan; on the diplomatic front it effectively amounts to letting Iran politically commit suicide. In the eyes of traders, that so-called 15-point ceasefire plan isn’t meant to get a deal—it’s only an extreme pricing anchor. What he’s essentially doing is managing expectations. Since he can’t force a breakthrough of the strait by force within 4–6 weeks, he keeps feeding the global market a mirage of a problem being solved. He releases peace signals through the media to prevent oil prices from completely running out of control, and by reducing market volatility through public opinion, he mitigates the economic impact and hedges against the inflationary pressure caused by a physical interruption of crude supply. He’s only using words and negotiations** to maintain market liquidity, to secure political and temporal room for the next** even more extreme war. He’s very capable at the information war—that’s a Schrödinger’s state for him in this regard.
Trump’s sense of powerlessness also shows in how he steers the market. The fact that he can say the war ends with the strait closed is, in effect, an admission that** under land-power pressure, the U.S. has temporarily lost physical control of the world’s most important energy chokepoint.

**Now the structural shift has also changed a lot—it’s a transfer of energy pricing power. Physical laws don’t lie: the burned ships won’t be restored, the severed supply chains won’t automatically reconnect because of a single Trump sentence, and the strait won’t open just because Trump steps back—besides, he can’t step back anyway.
This morning, the bombing of Qatar’s oil tankers didn’t matter to the market, but when Trump released the news, the market got extremely excited. The infrastructure targeted by the war (refineries, tankers, ports, pharmaceutical plants, aluminum plants, etc.) is a physically irreversible process. Hatred has entered a self-perpetuating loop—this is common knowledge, not something that can be fixed with statements. And when the market repeatedly desensitizes the impact of those statements, then it’s close to the next round of fighting.
****Trump is using fake peace to steady the market, while Iran is using real supply cuts to hit back at Trump. The main line of escalation is inevitable, because in the laws of nature there’s no stable intermediate state.