Trump Reiterates Claim Over Control of the Strait of Hormuz as Oil Rises Nearly 6% for the Week: Volatility Risks Mount for the U.S. Dollar and Crude Oil

Market risk aversion continues to rise. According to reports, U.S. President Donald Trump recently made another hardline statement regarding the Strait of Hormuz, saying that after the United States has “completely defeated Iran,” it will declare the Strait of Hormuz to be “U.S. territory.” Although the remarks have sparked significant controversy—and Iran has countered that the strait remains under its control—concerns over geopolitical disruptions to energy transportation have already been rapidly reflected in crude oil prices.

Last Friday (14th), international oil prices moved higher. Brent crude futures rose 1.67% to settle at $88.52 per barrel, while West Texas Intermediate (WTI) crude futures gained 1.42% to close at $82.40 per barrel. For the week, Brent crude rose about 6%, while WTI climbed 5.4%.

Rising Risks in the Strait of Hormuz as Tanker Attacks Deepen Supply Concerns

The Strait of Hormuz is one of the world’s most important energy shipping routes, accounting for roughly one-fifth of global energy supply transportation. Any disruption to shipping through the strait could affect not only crude oil supplies, but also refined fuel prices, shipping insurance costs, and broader logistics expenses.

Market reports indicate that two vessels operated by Abu Dhabi National Oil Company (ADNOC) were attacked while passing through the Strait of Hormuz, further intensifying concerns about potential supply disruptions. At the same time, U.S.-Iran talks have yet to show meaningful progress, while Washington has indicated that it may maintain its maritime blockade of Iran indefinitely. These developments have kept geopolitical risk premiums embedded in oil prices.

Breaking news events such as tanker attacks have been a key driver behind recent oil price gains. Beyond the Middle East situation, drone attacks on export facilities at Russia’s Black Sea port of Novorossiysk have also added further uncertainty to the crude oil supply outlook.

High Oil Prices Are Not Just an Energy Issue—They May Also Affect the U.S. Dollar

For U.S. dollar traders, sharp movements in oil prices are not merely energy market events. They can also indirectly influence the U.S. Dollar Index and major currency pairs through inflation expectations, monetary policy outlooks, and risk-off sentiment.

If oil prices continue to rise, markets may focus on the following three areas:

1. Renewed inflation pressure

Higher crude oil and fuel prices may push up overall inflation expectations. If U.S. inflation cools more slowly than expected, the Federal Reserve may adopt a more cautious stance on interest-rate cuts, which could theoretically support the U.S. dollar.

2. Safe-haven flows into the U.S. dollar

When geopolitical tensions escalate, the dollar often attracts a certain degree of safe-haven demand. However, if markets believe an energy crisis could hurt U.S. consumer spending and corporate earnings, dollar gains may be limited by falling risk assets and concerns over economic growth.

3. Rising oil prices driving commodity-currency volatility

Currencies closely tied to energy exports, such as the Canadian dollar and Norwegian krone, may receive support from stronger oil prices. As a result, traders may want to closely monitor pairs such as USD/CAD and USD/NOK.

Rising Inventories and Slower Demand Growth May Limit One-Way Oil Gains

While geopolitical risks have lifted oil prices, the fundamental backdrop is not entirely bullish. OPEC expects oil demand growth to slow, while U.S. crude inventories have posted their largest weekly increase in more than three and a half years. This suggests that actual supply and demand conditions may be looser than markets had previously expected.

Recent reports from the International Energy Agency (IEA) and the U.S. Energy Information Administration (EIA) indicate that inventory conditions appear better than the market had feared, which could put pressure on oil prices. In other words, the oil market may continue to be pulled between “geopolitical supply risks” and “inventory and demand fundamentals,” potentially leading to significantly amplified short-term volatility.

Which Markets Should CFD Traders Watch?

In a rapidly changing news environment, traders may want to keep an eye on:

• WTI Crude Oil and Brent Crude Oil CFDs: Monitor shipping activity in the Strait of Hormuz, tanker security incidents, and developments in U.S.-Iran negotiations.

• U.S. Dollar Index and Major Currency Pair CFDs: In particular, EUR/USD, USD/JPY, GBP/USD, and USD/CAD, which has a relatively strong correlation with oil prices.

• Gold CFDs: If safe-haven sentiment strengthens, both gold and the U.S. dollar may attract investor attention. However, actual price movements will still depend on U.S. Treasury yields and expectations for Federal Reserve policy.

Geopolitical developments can often trigger market gaps, sharp rallies or selloffs, and reduced liquidity. CFDs involve leverage, which can amplify both potential profits and potential losses. Before trading, consider setting stop-loss levels, managing position sizes, and avoiding excessive price chasing during major breaking-news events.

Looking to capture real-time movements in crude oil, the U.S. dollar, and gold? Trade CFDs on Bitget to flexibly explore opportunities across diverse markets. However, make sure you understand the associated risks and trade prudently based on your own risk tolerance.