The crude oil market's sensitivity to Trump's statements is systematically fading. A single tweet threatening Iran once sent oil prices soaring 7% in a single day, yet similar remarks now barely stir any reaction. According to a Bloomberg analysis of price movements, as the US-Iran conflict drags on, Trump's influence on global crude markets has weakened markedly.

On April 1 this year, Trump vowed in a televised address to strike Iran and send it "back to the Stone Age," sending oil prices surging in early Asian trading and ultimately closing up more than 7%, above $109 per barrel. By October 1, however, when Trump again warned Iran to "sign a ceasefire or cease to exist," crude prices barely budged. The same threatening language, yet the market's response could not have been more different.

According to an October 8 Bloomberg report, crude traders interviewed said they no longer focus on White House rhetoric, instead turning their attention to hard data such as physical supply changes and freight flows. At the same time, given the highly unpredictable nature of US war strategy, traders are actively reducing their position sizes. This shift not only affects energy markets but will further blur the inflation outlook and have ripple effects on global interest rate policy direction.

From universal obedience to desensitization: Seven months of eroding trust

In the early days of the Iran war, every word from Trump gripped crude traders' nerves. The specter of a Strait of Hormuz blockade long haunted the market, repeatedly priced in as the worst-case scenario. As that nightmare partially materialized — shipping through the waterway nearly ground to a halt — global energy markets suffered a severe shock.

Over the following seven months, however, Trump repeatedly hinted at progress or an imminent deal in US-Iran diplomatic talks, only to swiftly reverse course. He also floated the idea of charging fees for Strait of Hormuz transit, only to abandon it within a day. The back-and-forth policy signals led traders to gradually view his remarks as unreliable price guidance.

"For months, headlines have been spinning like a carousel," said John Kilduff, a partner at Again Capital. "Trading this market now is basically playing geopolitical roulette. Everyone I talk to is scaling back their trades."

Rob Thummel, senior portfolio manager at Tortoise Capital Advisors LLC, also noted:

"The White House's flip-flopping has left traders in a state of collective paralysis."

Price swings narrow, liquidity dries up

As traders step to the sidelines, intraday crude price fluctuations are contracting in tandem. According to Bloomberg's analysis of intraday price movements, the daily high-low spread is now far smaller than in the early days of the war, and reduced strikes on energy infrastructure have further suppressed market volatility.

More alarming is the liquidity crisis. Open interest in Brent crude futures contracts has fallen to its lowest level since March 2025. The shrinking market depth means that any sudden event could trigger more violent and irrational price swings.

When rhetoric-driven volatility fades, the market sometimes becomes a hunting ground for algorithmic traders. Commodity trading advisors (CTAs) and other algorithmic traders, who primarily follow momentum strategies, tend to amplify price swings in two-way markets. Although such moves typically normalize before the trading day ends, the process can cause severe divergence between physical and paper markets and push traditional investors further to the sidelines.

Supply data replaces presidential tweets as the new anchor

As Trump's words lose their pricing power, physical supply indicators are filling the void. Traders are turning their gaze to freight flows, pipeline data and other hard metrics that can be tracked in real time and acted upon directly.

Michael O'Rourke, chief market strategist at JonesTrading Institutional Services LLC, said:

"The president says a lot, and his positions change quite frequently. After several rounds of headline shocks, the market does develop a desensitization effect. Now everyone is clearly more focused on physical flow data because it's real-time and actionable."

Even the analyst community admits it is struggling to build effective models for the war's trajectory. JPMorgan analysts wrote in a recent research note:

"We simply don't know how to model the outcome. In the early days of the war, we thought we did."

Energy shock spills over, macro impact far-reaching

The Iran conflict has triggered the worst oil supply shock in history. Combined with Ukraine's sustained strikes on Russian refining facilities, retail fuel prices in many parts of the world have risen to record highs. Central bank officials in Europe and elsewhere have voiced concerns about stubborn inflation driven by soaring energy costs, and oil price movements have become deeply embedded in the pricing logic of bond and equity markets.

In the United States, elevated energy prices are putting political pressure on Trump's Republican Party, casting a shadow over the prospects for the November midterm elections.

Reduced visibility in crude markets will directly blur the global inflation path, in turn affecting central banks' room for interest rate decisions. When one of the market's most important price signals falls into chaos, the spillover effects will extend far beyond the energy sector itself.

Still, most traders acknowledge that Trump's statements cannot be entirely ignored — he is, after all, the ultimate decision-maker on military deployments and the direction of the Iran war. But until clearer signals emerge from outside the White House, most speculators are choosing to stay put and wait for physical supply data to point the way.