Why Oil Traders Are Tuning Out Trump’s Iran Rhetoric

Crude oil markets are experiencing a profound shift in volatility as traders increasingly ignore threats of military action against Iran issued by President Donald Trump. Bloomberg reported that while early escalations in the conflict routinely triggered massive spikes in energy prices, recent warnings have failed to move the needle on international crude benchmarks.

The stark contrast in market behavior is visible when comparing presidential statements across the timeline of the ongoing conflict. On April 1, President Trump warned in a televised address that the United States would strike Iran and send it “back to the stone ages” unless a peace deal was signed, prompting oil prices to surge more than 7% to close above $109 a barrel. By contrast, when Trump told reporters on Oct. 1 that Iran should sign a ceasefire deal or it would cease to exist, Brent crude prices barely moved.

The Dwindling Impact of Presidential Rhetoric on Brent Futures

As the conflict with Iran has dragged on, the market impact of presidential commentary has dimmed, according to a Bloomberg analysis of price moves. Oil traders interviewed by Bloomberg News indicate they are paying less attention to political rhetoric and focusing instead on evidence of changes in physical supply and cargo flows. Traders have also decreased the size of their wagers to mitigate exposure to unpredictable U.S. war strategies.

“It’s been a headline-o-rama for months now,” John Kilduff, a partner at Again Capital, told Bloomberg News. “You’re really playing geopolitical roulette at this point. Everybody I talk to is trading smaller.”

This widespread withdrawal of speculative capital has caused daily price swings to shrink. The gap between session highs and lows is now much smaller compared to the early months of the war, and overall market volatility has calmed alongside fewer strikes against energy infrastructure.

Shrinking Open Interest and Algorithmic Market Disconnects

The prolonged uncertainty has taken a heavy toll on market liquidity. Open interest across Brent oil futures contracts has plunged to its lowest since March 2025, leaving traditional investors sidelined as they struggle to model the endgame of the conflict.

“Traders are paralyzed by all the back-and-forth out of the White House,” said Rob Thummel, senior portfolio manager at Tortoise Capital Advisors LLC. Analysts at JP Morgan echoed that sentiment in a recent note, admitting that modeling the endgame of the war has proven difficult.

With traditional speculators stepping back, the market is frequently left at the mercy of algorithmic trading systems. Commodity trading advisers rely on momentum-driven strategies that can amplify intraday price swings in both directions, occasionally creating a disconnect between physical and paper markets.

Shifting Focus to Real-Time Physical Supply Indicators

Despite the desensitization of energy traders, the president remains the final authority on decisions around military deployment and, ultimately, the course of the Iran war. However, frequent reversals regarding diplomatic talks and transit fees have rendered official commentary an unreliable indicator for what happens next for oil prices.

“The president says a lot of things and he changes his view pretty frequently. After a few rounds of headlines, the market does become desensitized,” said Michael O’Rourke, chief market strategist at JonesTrading Institutional Services LLC. “There’s definitely more focus on physical flows data because it’s real-time and actionable.”

That pivot toward hard data occurs against a backdrop of a significant supply shock. The conflict has triggered a near halt to shipping through the Strait of Hormuz, while parallel attacks on Russian refiners by Ukraine have pushed retail fuel prices to record levels in many pockets of the world. With central banks monitoring energy-driven inflation closely ahead of upcoming U.S. midterm elections, the broader economy remains vulnerable to physical supply realities even as paper markets tune out the noise.

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