President Donald Trump criticized Iran’s controversial May 10 peace deal, calling it “absolutely unacceptable” in a tweet. Brent crude jumped 4.1% to $104.47 a barrel, while WTI rose 4.4%.
The rejection escalates a 10-week war involving the US, Israel, and Iran that is already choked with one of the world’s worst tensions. The Strait of Hormuz, a narrow channel through which about a fifth of the world’s oil flows, remains closed.
What Iran wants, is why Trump said no
Iran’s demands came through Pakistani intermediaries. Tehran called for an end to all sanctions, an end to the naval blockade, a withdrawal of hostilities, and control of the Strait of Hormuz itself.
Israeli Prime Minister Benjamin Netanyahu encouraged a hawkish stance, saying that “the war against Iran is not over” until the nuclear threat ends.
Oil markets are in a long-term trend
Gold moved in the opposite direction, falling to $4,690 an ounce. With peace talks stalled, some demands for safe havens appear to have shifted from gold to direct displays of power.
What does this mean for crypto and risky assets
High oil prices feed inflationary expectations. Expectations of higher inflation raise yields. High yields make speculative assets such as Bitcoin and altcoins less attractive for adjusted risk.
Rising electricity prices increase the cost of Bitcoin mining, especially in operations that rely on natural gas or grid power connected to fossil fuels. Operators in thin slots may face pressure to make a profit, which may result in a forced sale of Bitcoin reserves to cover operating costs.
