Gulf countries issue urgent warning, Trump is forced to delay actions, the game behind the sharp drop in oil prices

Source: Huitong Network

Huitong Finance APP News—Late Tuesday evening, the situation in the Middle East showed new developments. In a standoff with Iran, U.S. President Donald Trump suddenly halted further military action. Earlier, the Gulf Arab states had clearly warned that if the United States strikes Iran’s power grid, it would trigger Iran’s harsh retaliation against key energy infrastructure in the Gulf region. This abrupt shift highlights the strategic predicament faced by the Trump administration amid the current crisis.

Gulf states issue direct warnings, forcing Trump to pause his actions

According to regional sources and analysts, the Gulf Arab states have directly warned the U.S. government, making it clear that if the United States carries out strikes on Iran’s power plants, it will trigger strong retaliation by Iran against key energy infrastructure of the Gulf states as well as seawater desalination facilities. These warnings directly prompted Trump to suspend the planned upgrade.

Gulf officials are concerned that Trump may have seriously misjudged Iran’s resilience and its willingness to escalate the conflict.

They pointed out that once Iran’s power grid is attacked, Tehran is likely to take “unlimited retaliation,” directly threatening the energy security of the entire Gulf region. This means the Trump administration, which previously believed the issue could be resolved quickly through pressure, now has to reassess the risks.

Iran refuses to reopen the Strait of Hormuz; oil prices surge and stocks plunge

Iran’s refusal to reopen the Strait of Hormuz, a critical oil transport route, has led to an intensification of global energy supply tensions. As a result, the price of Brent crude rose sharply, and international stock markets also saw significant declines in tandem. Iran sent a clear warning to the Gulf states through an Arab intermediary: if the United States attacks its power plants, Iran will take “unlimited retaliation” measures.

Alan Eyre, a former U.S. diplomat and expert on Iran, said: “When Trump said, ‘You must reopen the strait within 48 hours,’ he completely misread the situation. Once it becomes clear that Iran really intends to retaliate by striking the Gulf’s energy infrastructure, he would have no choice but to back down.”

Alex Vatanka, an analyst at the Middle East Institute, further noted that Tehran’s sustained ability to confront and its willingness to escalate without restraint left Trump greatly surprised. He added: “They have no qualms, no limits, and they are not stopping.”

Trump misjudges Iran’s resilience; the strategic shift reveals limitations

Analysts generally believe that Trump originally expected Iran to give in quickly due to internal pressure or deterrence, but instead it encountered an asymmetric escalation.

Although Iran suffered heavy blows, it was not broken. On the contrary, it demonstrated a strong determination to retaliate. This forced Trump to adopt the familiar “tough rhetoric, delayed action” pattern in order to preserve flexibility in policy and avoid letting a show of force turn into a long, drawn-out quagmire that could potentially decide the fate of his presidential term.

Alex Vatanka emphasized that the Gulf states ultimately paid the heaviest price. He said: “If I were a leader of a Gulf state, I would be extremely angry. They were placed in enormous risk without their consent, and the damage caused in just four weeks may take years to make up for.”

On a deeper level, this conflict has already disrupted the Middle East scenario that Trump thought he could reshape quickly. While Iran was hit, it also drew clear lessons from it: deterrence is effective. Confidence and fear are intertwined, shaping Tehran’s strategic considerations—either to gain lasting benefits from this war, or to run the risk of being pulled into an even larger conflict again.

For Trump, any final agreement would be narrower in scope and more costly than he initially expected, and would be harder for the public at home to accept.

Overall outlook

Trump’s sudden “pause” on the Iran issue reflects the complex realities the United States faces in its Middle East strategy. The Gulf states’ strong warnings, Iran’s hardline stance, and the sharp volatility in global energy markets have all forced Washington to reexamine the costs of escalation in the conflict. Under the current circumstances, communication through diplomatic channels is still ongoing, but there remains a high degree of uncertainty about how the conflict will unfold.

Market participants should closely monitor the progress of subsequent high-level talks, as well as each side’s final statements on the issue of the Strait of Hormuz.

Analysis of the impact on oil and gas market

Overall, the impact of this event on international oil and gas markets is primarily a short-term negative factor, but there is still uncertainty in the medium to long term. The decision to temporarily hold off on strikes against Iran’s power grid directly eased market concerns about further escalation of the conflict, putting pressure on oil prices to pull back in the short term. However, the Strait of Hormuz is still currently closed, with about 20% of global oil transport affected, and the supply tightness situation has not been fundamentally alleviated. Although Brent crude prices saw a partial decline at certain stages in response to the news, as long as the strait is not reopened, oil prices will continue to maintain a high-level, range-bound pattern. Analysts expect that if ceasefire negotiations fail to achieve substantial progress quickly, oil prices may fluctuate repeatedly within the $95–110 per barrel range; conversely, if diplomacy achieves a breakthrough, oil prices could fall to below $90.

For natural gas markets, the temporary easing of Iran’s retaliation risk also provides a short-term breather for LNG (liquefied natural gas) transport routes, but the long-term vulnerability of Middle East energy infrastructure will still support defensive demand for natural gas prices. As the world’s largest natural gas producer, the outlook for U.S. exports may improve slightly as tensions ease, but reshaping the global energy supply chain will still take a longer time.

Overall, in the near term, the oil and gas sector is likely to see high volatility driven by “news catalysts,” and investors need to be wary of the typical pattern of “buy the rumor, sell the fact.” In the medium to long term, the final direction of the Strait of Hormuz, the security of Iran’s nuclear facilities, and the pace of the global energy demand recovery will jointly determine the trend direction of oil and gas prices. It is recommended to watch the progress of U.S. strategic petroleum reserve releases and OPEC+’s subsequent statements to capture potential trading opportunities.

Brent crude continuous daily chart Source: Yi Huitong Beijing time March 25 15:20 Brent crude continuous Reported at 99.88 USD/barrel

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Responsible editor: Song Yafang