Trump's promises deceive markets: Oil should be much more expensive, lament Swiss commodity giants

At the Financial Times Commodities Global Summit in Lausanne, a palpable sense of unease permeated the air among Swiss commodity traders. While the markets appear calm, these industry professionals are deeply concerned that the West is underestimating the severity of the energy shock stemming from the Iran conflict. Their primary worry is not the immediate market fluctuations, but the unpredictable influence of Donald Trump's pronouncements, which can send oil and gas prices on a wild ride with a single tweet.

Russell Hardy, CEO of Vitol, articulated this concern, noting the White House's attempts to manage markets through such communications. The situation is dire, with supply disruptions exceeding those seen during the 1990 Iraq-Kuwait conflict. Yet, the Brent crude oil price remains below $100 per barrel, and stock markets are near record highs. This disconnect between the physical reality of supply shortages and market pricing is described as surreal by many traders.

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We must pay attention to these tweets. The White House is trying to defuse the markets with them.

From a Swiss perspective, deeply embedded in global commodity trading, this disconnect is particularly alarming. The article, published in the Neue Zürcher Zeitung, reflects a concern that financial markets are being misled by Trump's promises, which often run counter to unfolding events, such as Iran's actions in the Strait of Hormuz. The commentary highlights a critical divergence between the perception shaped by political rhetoric and the tangible realities faced by those managing the global flow of energy resources. This situation underscores the vulnerability of the global economy to geopolitical events and the volatile nature of market sentiment when influenced by political figures.

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It is shocking: the tweets fight against reality, and the tweets win.