Trump Says New Round of Strikes on Iran Won’t ‘Last Long’, Oil Price Rally Pauses

After three consecutive days of sharp gains, oil prices have stabilized as the market balances ongoing tensions in the Middle East with expectations that both sides are seeking a "de-escalation".

According to CCTV News, on September 2 local time, U.S. President Trump told reporters at the White House that the new wave of U.S. strikes against Iran would not "last long".

Trump said Iran is trying to rebuild its radar systems, missile systems, and mine-laying capabilities. The U.S. military’s attack on Iran on the 1st was "very fierce," destroying all new equipment Iran was trying to deploy along the coast of the Strait of Hormuz. “We are ready to launch another strike at any time.”

Trump also stated that the United States has controlled and will continue to control the situation in the Strait of Hormuz. “Every day, a large number of ships carry millions of barrels of oil in and out, and overall everything is going well. Although occasionally drones are shot down, we have a firm grip on the situation.”

As a result, after a cumulative three-day gain of about 9%, WTI crude stabilized near $91/barrel, while Brent crude settled below $96 on Wednesday.

Dennis Kissler, Senior Vice President at BOK Financial Securities, said the latest round of escalation should provide support for the market, but attention should be paid to the fact that both the U.S. and Iran are looking for “exit ramps,” and “signs of more peace talks could quickly push oil prices lower.”

So far this year, driven by both Middle East conflict and the Russia-Ukraine war, oil prices have collectively risen close to 60%, with refined products like diesel showing even more pronounced increases.

According to CCTV, U.S. Central Command announced on social media on the 1st that the U.S. military has completed a new round of strikes against Iranian military targets, including the air defense positions, radar systems, maritime assets and facilities, mine-laying capabilities, and communication stations of the Islamic Revolutionary Guard Corps.

On the 1st, the Islamic Revolutionary Guard Corps announced it had begun responding to that day's U.S. attack and claimed to have shot down a U.S. MQ-9 drone. In the early morning of the 2nd, the Jordanian Armed Forces stated that Jordan's air defense system intercepted 10 ballistic missiles from Iran over the past few hours, with another 3 missiles falling in remote areas.

Goldman Sachs analyst Privorotsky judged that the current situation is still relatively manageable compared to the worst case—so far, Iran's actions have mainly targeted military rather than energy infrastructure. However, the market’s focus is now entirely on whether the Strait of Hormuz can remain open.

U.S. Secretary of Energy Chris Wright stated this week that on Monday about 17 million barrels of crude oil passed through the Strait of Hormuz, with an average daily flow of about 8 million barrels.

However, this data is being questioned by the market. Some tankers have previously turned off their Automatic Identification System (AIS) transponders to avoid risk while leaving port, making the authenticity of actual throughput uncertain. Analysts point out that if flows are indeed normalizing to this level, oil prices may face downward pressure.

The other key factor supporting oil prices is the ongoing diplomatic deadlock.

Since the phased ceasefire deal reached in June fell apart, neither the U.S. nor Iran has shown willingness to return to the negotiating table, suppressing market expectations for a rapid easing of tensions. Dennis Kissler, Senior Vice President at BOK Financial Securities, said:

The latest escalation should continue to provide support for the market, but be aware that both the U.S. and Iran are looking for exit ramps. Should there be more signs of peace negotiations, prices could quickly fall.

Historically, such conflicts often cool rapidly following a sharp escalation. Some market participants have noted that whether a political window appears before "Labor Day" in the U.S. will be an important indicator for where the situation is heading.

Fundamental data also provide some support for oil prices. U.S. Energy Information Administration (EIA) data showed that U.S. crude inventories dropped by 4.5 million barrels last week—the first decline since the end of July.

Cushing, Oklahoma delivery inventories edged up to 22.5 million barrels, while gasoline inventories declined.

It’s also worth noting that the supply pressure for refined products such as diesel and distillates is equally significant. Ongoing Middle East conflict continues to disrupt refinery operations and refined product shipments, causing diesel prices to rise more than crude itself—making it another structural pressure point in this round of energy price increases.