The Memo: Trump at risk from oil price roller coaster amid Iran war

The war in Iran sent financial markets and energy prices on a roller-coaster ride on Monday, underlining the political challenges for President Trump in a mixed and rapidly shifting economic landscape.

Nowhere was volatility more evident than in the price of oil.

Late Sunday, oil futures rocketed by close to 20 percent, sending tremors across the globe. By late afternoon Monday, the shocking rise had been fully reversed — and more. The oil price had fallen by around 7 percent by 5 p.m. EDT.  

The same period also saw wild gyrations in financial markets.

Futures markets on Sunday night pointed to a drop of around 900 points for the Dow Jones Industrial Average on Monday. The Dow in fact ended Monday up by almost 250 points.

Political and military factors drove the price changes in both directions. The vertiginous rise in oil came amid fears over shipping in the crucial Strait of Hormuz off Iran’s southern coast, and consternation about the Islamic Republic’s elevation of Mojtaba Khamenei as supreme leader.

Khamenei follows in the footsteps of his father, Ayatollah Ali Khamenei, who served as supreme leader from 1989 until his assassination in an Israeli airstrike on Feb. 28.

The selection of Mojtaba Khamenei was seen as a gesture of defiance, suggesting the Islamic Republic is unwilling to brook compromise to end the combined U.S. and Israeli assault.

On the flip side, the sharp fall in oil prices and the stock market rally on Monday afternoon appeared to be a response to remarks Trump made in a phone interview with Weijia Jiang of CBS News.

Trump told Jiang that he felt “the war is very complete, pretty much” and that the United States attack on Iran was “very far” ahead of his initial estimate that it would last between four and five weeks.

Trump, who spent........

© The Hill