President Donald Trump delivered his first nationally televised address on the Iran conflict, and instead of offering an off-ramp, he escalated.
He threatened to hit Iranian power plants and water desalination facilities “extremely hard” within two to three weeks, reiterated his April 6 deadline for the Strait of Hormuz to reopen, and went further.
“Iran’s ‘New Regime President’ is asking the United States for a Ceasefire… Until then, we are blasting Iran into oblivion or, as they say, back to the Stone Ages!!!,” Trump wrote on social media Wednesday.
WTI crude – as tracked by the United States Oil Fund (NYSE:USO) – surged 9% to $110 a barrel Thursday morning, and the stocks most exposed to jet fuel, diesel, and consumer spending are leading the selloff.
What Did Trump Actually Say — And Why Did Oil React?
Oil fell earlier this week precisely because traders expected Trump’s prime-time address to be an off-ramp.
The speech contained no plan for reopening the Strait.
Instead, the president outlined a 2–3 week intensification of the air campaign, threatened to destroy Iran’s electricity generating plants and water desalination facilities if no deal emerges.
Dennis DeBusschere, portfolio strategist at 22V Research, said the implications of Trump’s Hormuz handoff were stark. “Just pulling out of the gulf hands over some control of U.S. oil and gasoline prices to other countries, not least Iran,” DeBusschere said.
According to DeBusschere, that move amounts to ceding pricing power to actors with interests that directly diverge from Washington’s — and he described the rationale for such a war strategy as mystifying at a moment when gasoline prices are already a growing political liability.
Jacob Funk Kirkegaard, analyst at 22V Research, said the address failed at the one task it needed to accomplish.
According to Kirkegaard, Trump prepared his off-ramp from the conflict and then inexplicably declined to take it — opting instead to announce another 2–3 weeks of intensified bombing at a moment when high-value targets have already become fewer in number.
“Continuing the war with a more or less unchanged campaign strategy will merely increase the gradually building economic pressures on the U.S. and global economy,” Kirkegaard said, warning that physical shortages of refined oil products will accelerate around the world in the coming days and weeks, hitting Asia hardest first before spreading across Europe and toward North America.
What Oxford Economics Says About the Oil Math
Ryan Sweet, global chief economist at Oxford Economics, said Trump’s address does not justify changing his Q2 Brent forecast of $113 a barrel, nor does it significantly alter the balance of risks.
“The military timeline differs from the economic one,” Sweet said, noting that the Strait of Hormuz remains effectively closed and his baseline does not assume that changes before the end of April.
According to Sweet, strategic reserve releases and inventory drawdowns become less effective the lower they fall — meaning the longer the Strait stays shut, the harder the math gets for global oil supply and the more economic costs mount with each passing day.
Sweet estimates the average second-quarter oil supply disruption will run roughly 7.5 million barrels per day, with an underlying shortfall of around 2 million barrels per day that is poised to grow.
According to Sweet, even a partial reopening — with tanker traffic recovering to about 50% of pre-war levels in May and June — would ease but not close that gap, keeping upward pressure on oil prices into the third quarter.
He said Trump’s decision to intensify attacks over the next couple of weeks signals escalation before de-escalation, keeping elevated the risk of damage to energy infrastructure and the risk that oil prices end the year higher than currently anticipated.
The 5 Travel Stocks Hit Hardest Thursday
Jet fuel and diesel are the biggest variable cost for airlines and cruise lines. A sustained crude spike converts directly into narrower margins — or losses — unless carriers can push through fare hikes fast enough to compensate.
Thursday’s move was steep enough that investors did not wait for earnings guidance revisions.
As of 11:20 a.m. ET, these five names are bearing the most direct pain.
| ompany | Why Oil Hurts | Change % |
|---|---|---|
| American Airlines Group (NASDAQ:AAL) | Highest fuel-cost exposure among U.S. majors; limited hedge book means crude spikes flow through immediately | −4.78% |
| United Airlines Holdings (NASDAQ:UAL) | Jet fuel is ~25% of operating costs, per United’s annual report; every $10/bbl increase adds ~$1.5B to annual fuel costs | −3.68% |
| Carnival Corp. (NYSE:CCL) | Heavy fuel oil is the primary ship operating cost; $4+ gas also suppresses discretionary cruise bookings | −3.16% |
| Norwegian Cruise Line Holdings (NYSE:NCLH) | Same dual pressure as Carnival: rising bunker fuel costs plus consumers pulling back on discretionary spending | −2.89% |
| Southwest Airlines (NYSE:LUV) | All-737 fleet with reduced fuel hedge coverage; cost per available seat mile rises directly with crude | −2.83% |
Photo: Gary Cosby Jr.- Imagn Images
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