Gulf states stick with blockade as Trump calls fresh Iran strikes “quite unlikely”

Oil markets are weighing two forces from the latest Washington signals. Any reduction in the chance of fresh US strikes would shave part of the war premium that carried Brent above $120 in April. Yet the arrangement Gulf capitals reportedly prefer means Iranian supplies stay off the market. Tehran, for its part, has linked a return to normal shipping through the Strait of Hormuz to the lifting of the blockade. The result is a price floor built on tight supply even as the threat of escalation ebbs. Unless a deal brings Hormuz traffic back to normal, any pullback triggered by de-escalation headlines may have limited room to run.

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Trump is playing down the prospect of further strikes on Iran while keeping the pressure campaign intact, and Gulf partners are reported to prefer a land-and-sea blockade to another conflict.

Summary:

• After a call with Qatar’s Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani, Trump said another round of US military action against Iran appears “quite unlikely.”
• The status quo, in Trump’s account, is favoured by Qatar, Saudi Arabia, the UAE, Bahrain, Kuwait and others: the US naval blockade combined with the new Iron Gate land operation.
• There is consensus that Iran must not get a nuclear weapon, a point Trump termed non-negotiable, and he said Washington remains prepared to move if the situation shifts.
• On Saturday, US Central Command created Task Force Iron Gate to interrupt Iranian weapons and sanctioned-goods traffic moving overland or across the Caspian Sea.
• More than $25 billion of Iranian crude exports have been stopped in recent months by the sea blockade, CENTCOM says.
• Trump also pointed to “positive momentum” in efforts to end the conflict.

After his call with the Qatari prime minister, President Donald Trump described another round of US military action against Iran as “quite unlikely.” The implication, as he framed it, is that Washington intends to keep applying pressure via blockades rather than launch new attacks.

Writing on Truth Social on Monday, Trump said the preferred option for Qatar, Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait and other countries in the region is to preserve the current arrangement. That arrangement, in his description, means the US naval blockade of Iranian ports continues side by side with the recently started Iron Gate operation, giving Iran coverage from both land and sea. Trump said there is agreement across all parties that Iran cannot be permitted to obtain a nuclear weapon, describing that as non-negotiable. He also said the United States is ready to respond should regional conditions change, and he spoke of “positive momentum” toward ending the conflict.

US Central Command unveiled the Iron Gate initiative on Saturday. The task force consists of roughly 20 civilian and military personnel and is headquartered in Tampa, Florida. Its mission is to stop Iran from moving weapons, dual-use technology and sanctioned goods through its land borders and the Caspian Sea. The sea blockade, according to CENTCOM, covers Iranian ports in the Gulf and the Gulf of Oman and has halted more than $25 billion of Iranian crude exports over recent months.

Oil is being pulled in two directions by the latest message. With the risk of a renewed campaign of large-scale strikes receding — a threat that helped take Brent above $120 in April — part of the war premium is being stripped out. But the blockade-centred status quo preferred, according to reports, by Gulf states keeps Iranian barrels off the market. Tehran has also made the reopening of the Strait of Hormuz to normal traffic conditional on the blockade being lifted. On Friday, Brent recovered to near $98 after touching a two-month low, with tanker attacks in the Gulf countering expectations that tensions would ease after the US midterm elections.

To traders, the post suggests a lengthy period of stalemate more than a breakthrough. With no agreement to reopen Hormuz, worries about supply are expected to support prices even as the danger of another escalation retreats.