Trump admin Hormuz confusion drained $84 million from oil markets in just 10 minutes

Gas prices have become a constant concern for Americans, and the war with Iran has only exacerbated these worries. While the facts of the war impact energy costs for a variety of practical reasons, sometimes the harm is caused by less tangible occurrences, like a tweet.

On Tuesday, following threats that Iran would block the Strait of Hormuz—which experts have warned will cause extensive disruption to oil supplies—Energy Secretary Chris Wright posted on X that the US had successfully escorted an oil tanker through the imperiled waterway. This tweet, however, was quickly deleted, and it was revealed that no such escort had occurred.

The Energy Department issued a statement calling the tweet “incorrectly captioned,” but this did nothing to quell the uncertainty drummed up by Wright’s deleted assertion. In fact, it accomplished quite the opposite, sending oil prices on a rollercoaster that ended up slashing nearly $100 million from the market.

“The market is depending on accurate information from the administration,” explained Andy Lipow, president of analyst firm Lipow Oil Associates. “And when a tweet is posted and deleted quite rapidly, it brings into question what exactly is happening.”

Wright’s tweet exacerbated the already raging uncertainty, plunging crude prices by 19% and draining $84 million in market cap from oil futures in just ten minutes. Within two days, between the tweet and mixed statements from Trump, Hegseth, and other officials, the administration’s confused messaging had caused markets to swing by 36%—the largest fluctuation since the beginning of the pandemic in 2020. Finally, Wright conceded that disruption at the Strait would go on for “weeks” at least, and it is currently estimated that only 8% of the usual flow of oil is making it through.

According to Eva Roytburg of Fortune Magazine, the wildly vacillating prices were driven “less by the fundamentals than by the inability of traders to distinguish signal from noise when the executive happens to be the source of both.”

On Wednesday, member countries of the International Energy Agency agreed to release 400 million barrels of reserve oil in hopes of easing costs. While this news precipitated a brief dip, the relief was temporary as prices resumed their upward climb. With the current supply reduced by 20 million barrels, the 400 million barrel release will only cover the losses for about three weeks.

“Something has to be done,” Lipow said, “but it may not be enough.”

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