Asian stocks traded downward on Thursday as US President Donald Trump reiterated his commitment to a strong response to Iran, promising further action “over the next two to three weeks.” This followed dramatic video footage emerging Wednesday showing large explosions and smoke rising near Isfahan, Iran.

Oil Prices Surge Amidst Geopolitical Tensions

Both global and US oil benchmarks surged following President Trump’s address. Brent crude spiked by more than 4% to over $105 per barrel, while WTI climbed more than 3% to over $103 per barrel. The conflict has effectively shuttered the Strait of Hormuz, a critical oil shipping route, handling roughly 20% of the world’s oil supply.

Trump Downplays US Reliance on Strait of Hormuz

President Trump stated that the United States imports almost no oil through the Strait of Hormuz and will not require it in the future, asserting US energy independence. He suggested that countries reliant on the strait should take responsibility for its protection, offering US assistance but emphasizing their primary role. He also claimed gas prices would fall rapidly once the conflict ends, a claim disputed by analysts.

Global Economic Impact and Allied Concerns

Australia, a close US ally, is experiencing economic fallout due to the disruption of oil shipments via the Strait of Hormuz. Australian Prime Minister Anthony Albanese acknowledged that Iran’s military capabilities have been degraded but questioned the lack of a clear endpoint to the conflict. He urged de-escalation and consideration of the war’s global economic impact. Panic buying has prompted calls for fuel conservation.

Market Reaction and Political Responses

US stock market futures also fell in off-hours trading. Reactions within the US political sphere were mixed. While some Republicans praised Trump’s leadership, former Rep. Marjorie Taylor Greene criticized the speech for lacking solutions to domestic economic issues. White House officials expressed satisfaction with the address, believing it justified the war and reassured Americans of its nearing completion.

White House Strategy and Future Outlook

The White House aimed to use the address to justify the war and highlight military successes, while reassuring the public that the conflict is nearing its end. President Trump framed the conflict as payback for decades of Iranian aggression and emphasized the importance of preventing Iran from developing a nuclear weapon. However, he did not offer a specific exit strategy or timeline for the war’s conclusion.