During President Trump's administration, the market is facing an unexpected and formidable opponent—a tweet from U.S. Energy Secretary Chris Wright and its swift deletion. This message, originally intended to demonstrate the U.S.'s commitment to global energy stability, triggered a violent shock in the highly sensitive oil market: Brent crude prices plummeted by several dollars within minutes, and related crude oil futures ETFs lost approximately $84 million in market value. Previously, only official statements from the White House could have such a direct and dramatic impact on investor sentiment. But now, at this critical juncture, with the Middle East conflict entering its 11th day, market nerves are stretched to the limit—any tiny, unverified piece of information is enough to create a massive uproar, even instantly reshaping global asset pricing.



The incident began on March 10 when Wright posted a video on the official X platform account with the caption: "The U.S. Navy has successfully escorted an oil tanker through the Strait of Hormuz to ensure the stability of global oil supplies." This statement was quickly shared by multiple media outlets, and the market interpreted it as the U.S. having substantially intervened in escort operations to alleviate the supply risk from Iran's blockade of the strait, causing oil prices to plummet. However, the White House immediately clarified: "The U.S. Navy is not currently escorting any oil tankers or ships through the Strait of Hormuz." The Department of Energy subsequently confirmed that the tweet was deleted due to a "caption error." White House Press Secretary Karoline Leavitt emphasized at a press conference that this information was inaccurate, but the escort option remained "reserved."

This blunder not only exposed the challenges of communication and coordination within the Trump team, but also highlighted the amplifying effect of any policy signals against the backdrop of oil prices already surging nearly 50% due to the conflict (from a peak of around $70/barrel at the beginning of the year to $119.5/barrel). The most pressing question for investors right now is: When will all this end?

Trump himself has repeatedly signaled optimism, stating that the US-Israel military action against Iran will "end soon" and be "very complete," and suggesting the conflict may last only about 12 days, highly similar to the brief conflict in the summer of 2025. At that time, similar geopolitical tensions subsided quickly within 12 days, oil prices fell, and the market stabilized rapidly. However, this round of conflict has lasted 11 days, with Iran's Islamic Revolutionary Guard Corps threatening to continue blocking the Strait of Hormuz (which carries approximately 20 million barrels of crude oil daily, accounting for 20% of global seaborne oil trade), and Iranian semi-official media even declaring "preparedness for indefinite confrontation." While Trump has threatened to "double down" if Iran continues to disrupt shipping, he has also stated that he will not get bogged down in another protracted Middle East war, leaving the market wavering between a "quick victory" and a "protracted war."

Meanwhile, the International Energy Agency (IEA) has activated its emergency mechanism, planning to coordinate member countries to release strategic petroleum reserves—a potentially record-breaking 300-400 million barrels (equivalent to 25%-30% of total reserves), far exceeding the 180 million barrels released by the United States alone during the 2022 Russia-Ukraine conflict. This move is strikingly similar to that of 2022, when the Biden administration used the Strategic Petroleum Reserve (SPR) to stabilize prices. However, this time, IEA member countries (including the G7) are holding a special meeting on March 11 to discuss the feasibility of a joint release. Saudi Arabia has already taken steps to reduce production, highlighting the ripple effects on the supply side. Analysts point out that if the release takes place, oil prices may fall below $90 per barrel in the short term, but the long-term outlook depends on the duration of the conflict and the extent of damage to Iranian infrastructure.

In a March 10 interview with French television, European Central Bank President Christine Lagarde stated unequivocally that the Eurozone is far better prepared for an energy crisis than it was in 2022. The bank will do everything in its power to prevent the conflicts between the US, Israel, and Iran from causing the same inflationary pain as in 2022. She emphasized, "We are in a better economic position with a stronger capacity to absorb shocks, and we will take all necessary measures to ensure that inflation is under control and that the French and Europeans do not suffer the same price surges as in 2022-2023."

In 2022, soaring energy prices pushed the Eurozone inflation rate from 5.9% to a record high of 10.6%, forcing the European Central Bank (ECB) to raise interest rates by a cumulative 450 basis points, increasing the deposit rate from -0.5% to 4%. While Eurozone deposit rates remain high today (even after previous rate cuts, they are still higher than pre-pandemic levels), a lower inflation base, diversified LNG imports, and more ample strategic reserves provide a buffer, giving Lagarde confidence. However, ECB Vice President Luis de Guindos also warned that market volatility could amplify the impact, and the central bank will assess various growth and inflation scenarios next week.

Financial markets have quickly adjusted their pricing: driven by conflict-led energy cost increases, traders now expect the European Central Bank to raise interest rates twice in 2026 (previously anticipated as a series of rate cuts), while the Federal Reserve's expected rate cuts in 2026 have been significantly lowered from 65 basis points to 36 basis points, with the first rate cut potentially delayed until September. Theoretically, a narrowing interest rate differential between the Eurozone and the US should have boosted the euro against the dollar—but this has not been the case. Investors generally doubt whether the Eurozone economy can withstand the double squeeze of rising borrowing costs and energy prices: as a net energy importer, Europe is likely to see GDP growth dragged down by 0.19% for every $20 increase in oil prices, far exceeding the US's 0.05%. The euro has currently fallen back to around 1.16 against the dollar, reflecting market concerns about European growth prospects outweighing the positive impact of policy divergence.

In the early stages of the conflict, the US dollar was highly sought after due to three main factors: first, its safe-haven status amid market panic; second, the structural advantage of the US as the world's largest net energy exporter (domestic crude oil production buffers import costs); and third, the relatively hawkish pricing by the Federal Reserve. These factors collectively pushed up the dollar index. However, as the conflict continues, the US economy will also face a drag—domestic gasoline prices have cumulatively risen by about 50 cents per gallon (exceeding $3.45 in some areas), putting pressure on both consumer spending and business costs, with the transportation and chemical supply chains bearing the brunt. At this point, investor interest may shift to commodity currencies such as the Canadian dollar (CAD) and the Norwegian krone (NOK): both countries are net oil exporters, and high oil prices will directly boost their trade surplus and fiscal revenue, highlighting their currency appreciation potential. Traditional safe-haven assets such as gold also rose in tandem, while energy stocks diverged—US shale oil companies benefited, while European refiners were under pressure.

A deeper risk lies in the resurgence of stagflation: high oil prices fuel inflation expectations while simultaneously suppressing growth. If the conflict extends for months, supply chain disruptions will impact global manufacturing, and major Asian importers like China and India will face a second wave of shocks. Conversely, if Trump manages to end the conflict in the short term (his latest statements point to "within weeks"), a drop in oil prices will trigger a renewed interest rate cut cycle, leading to a rebound in risk assets.

But uncertainty currently dominates everything: from Wright's tweet blunder to Trump's contradictory statements, the market is digesting every piece of geopolitical information with unprecedented sensitivity. Investors are still repeatedly asking – will this conflict end with a swift victory like in the summer of 2025, or a prolonged energy crisis like in 2022? Until the answer is revealed, any "rumors" will continue to be a "powerful adversary" influencing global capital flows.