Rising tensions in the Middle East pushed oil above $100 a barrel after Iran elected Mojtaba Khamenei as leader and reportedly began laying naval mines in the Strait of Hormuz.
The move threatens a chokepoint that carries roughly one-fifth of global crude supplies, raising concerns that escalating conflict could drive energy prices higher and destabilise global markets.
On March 10, US President Donald Trump demanded the mines be removed “IMMEDIATELY,” warning Iran would face unprecedented military consequences if they remain in the waterway.
Some investors on Wall Street are still betting on what traders call the “TACO” theory—short for “Trump Always Chickens Out”—which assumes the president will eventually back down or reach a rapid deal.
However, Jacob Manoukian, chief investment strategist at JPMorgan Private Bank, cautioned that geopolitical crises can evolve in unpredictable ways despite hopes for a quick resolution.
“As a strategist, the risk case that we’re worried about is that there’s a lot of potential paths that this can take, that are out of the control of one party or another,”
Said JPMorgan Private Bank chief investment strategist, Jacob Manoukian.
JPMorgan still believes a deal could emerge within two or three weeks, partly because Trump may want to avoid high oil prices before midterm elections and regional combatants face limits on weapons supplies.
Market sentiment improved after Trump said the conflict could end “very soon,” helping lift Bitcoin above $70,000 and pushing Asian equities higher while Brent crude fell sharply from $119.50 to about $91.37 per barrel.
At the time of reporting, Bitcoin price was $69,788.58.