Oil swings as report suggests Trump may end war without reopening Hormuz

Oil pulls back, but the market remains deeply stressed

Oil prices swung sharply after a report suggested President Donald Trump is willing to conclude the military campaign against Iran even if the Strait of Hormuz remains largely closed, raising fresh questions about how Washington plans to reconcile military objectives with an unresolved supply shock.

Washington may accept a partial military outcome

According to the report, Trump and his advisers have concluded that fully reopening the strait through military means would push the conflict beyond the administration’s preferred four-to-six-week timetable. Instead, the White House is said to be leaning toward a narrower objective: severely degrading Iran’s naval and missile capabilities, then attempting to wind down hostilities while relying on diplomatic pressure to restore maritime traffic.

That would mark a significant shift. It suggests Washington may be prepared to stop short of reopening the world’s most important oil chokepoint by force, even though the closure continues to choke off energy flows and destabilize markets.

Hormuz remains the core of the crisis

The Strait of Hormuz is still effectively shut, with crude, natural gas and refined products unable to move normally through the passage. That has left a large hole in global supply and turned the oil market into a daily referendum on war headlines, tanker attacks and military posturing.

The latest escalation came after Iran struck a fully loaded Kuwaiti crude tanker near Dubai, damaging the vessel and reigniting concerns that Tehran is widening its campaign against shipping across the Gulf. Since the war began, multiple vessels have been attacked, and traders now have to price not only physical disruption but also the growing risk that insurers, shipowners and governments refuse to treat the route as viable.

The market is no longer trading on headlines alone

Even with Tuesday’s pullback, oil remains dramatically higher for the month. US crude has surged more than 50% in March, on pace for its biggest monthly rise since 2020, while Brent is also headed for a major monthly gain.

That is why some market participants argue prices still do not fully reflect the physical severity of the disruption. The problem is no longer just geopolitical fear. It is the fact that millions of barrels a day remain effectively missing from the market while buffers continue to erode.

At this stage, every off-ramp narrative runs into the same obstacle: the waterway at the center of the crisis is still not functioning normally.

Mixed signals from the White House keep volatility high

The Trump administration continues sending conflicting messages. On the one hand, the report points to a willingness to end the war without first securing a military reopening of Hormuz. On the other, public officials are still speaking in hardline terms, insisting the US will retake control of the strait and guarantee safe passage through American or multinational escorts.

That gap between private strategy and public posture is feeding volatility. Traders are being forced to weigh whether Washington is genuinely seeking a faster exit or simply trying to stabilize markets while leaving the harder operational problem unresolved.

The supply threat could spread beyond Hormuz

Compounding the risk, Iran’s regional allies are also raising the stakes. Houthi attacks from Yemen have revived fears around Red Sea shipping, threatening alternative export routes that producers might otherwise use to bypass Hormuz.

That matters because the market is no longer dealing with a single blocked artery. It is confronting the risk of a broader regional disruption to shipping routes, energy infrastructure and tanker security at a moment when spare capacity and emergency measures can only cushion so much.

The real question is whether de-escalation can restore flows

For now, oil is trapped between two competing forces. One is the hope that the White House wants an endgame and may soon seek to reduce hostilities. The other is the reality that the physical disruption in the Gulf remains severe, tanker attacks are continuing, and no credible reopening of Hormuz is yet in place.

That leaves the market in an uncomfortable position. Prices can fall on de-escalation talk, but they struggle to stay down while actual flows remain impaired. Until that changes, oil is likely to keep swinging violently between diplomatic optimism and the hard arithmetic of missing barrels.