Expert analysis
Trump called Iran’s response to the US peace proposal “TOTALLY UNACCEPTABLE”.
The market reaction was immediate:
- Brent moved back above 100 USD/bbl
- TTF remains elevated around ~45 €/MWh
- geopolitical risk premium increased again
The core questions remain unchanged:
- will there be a real agreement?
- when can the Strait of Hormuz fully reopen?
- how long can the global energy system tolerate prolonged disruptions?
Right now, the market is pricing:
- escalation risk
- but also growing political pressure for a deal.
Why?
US side:
The US election campaign is approaching while Trump’s popularity is weakening.
High oil and fuel prices are politically extremely dangerous because they:
- increase inflationary pressure
- weaken consumer sentiment
- raise logistics and industrial costs
- directly hurt voters
For Trump, stabilising energy prices and communicating that he can “keep the conflict under control” could become increasingly important politically.
Iran side:
Iran is also facing growing difficulties in sustaining a prolonged conflict.
The key domestic political and economic challenges include:
- severe inflation
- weak currency
- high unemployment
- ongoing sanctions pressure
- fiscal problems
- rising social dissatisfaction
At the same time:
- oil exports remain vulnerable
- any prolonged naval blockade could severely reduce revenues
- the economy is becoming increasingly dependent on a faster resolution to the conflict
This is why the market still believes:
- neither side benefits from a full-scale prolonged war
- however negotiations remain extremely fragile
- every headline can trigger major price swings
The key themes for the coming days remain:
- Strait of Hormuz
- LNG flows
- oil exports
- geopolitical premium
- US domestic politics
Source:Reuters
Analysis written by: Tóth Eszter Lilla
11.05.2027