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Iran remains defiant and U.S. midterm elections are less than eight months away.
Those two statements probably sum up the state of affairs better than anything else. Why? Because Iran has a new leader who is determined to follow in his father’s footsteps, and because relatively cheap Iranian military technology (mostly drones) has proven effective against the Americans’ trillion dollar military extravaganza. In fact, so effective that the Americans are trying to tell a puzzled world that the military campaign is now largely complete, that there is no Iranian navy or air force left, and that the Americans can therefore pull out quite soon.
That last point brings me to the second opening statement. A recent Reuters (TRI) poll showed that only one in four Americans support the war in Iran. With the House of Representatives looking likely to go the Democrats, the Republicans can hardly afford so much resistance. Although Trump immediately labelled the Reuters poll “fake news”, it is obvious that he is rattled. In the press conference yesterday, he desperately looked for reasons to chicken out (again).
What did he really mean when he indicated that the Americans may pull out “quite soon”? In days? In weeks? Any longer? And where does that leave the Israelis? Nobody knows. When trading started yesterday, Brent oil was over $100/barrel – up from about $65/barrel only ten days ago (Exhibit 1).
Exhibit 1: Oil prices since January 2023 
Trump then went live with various suggestions. Pulling out of Iran ”quite soon” was on the agenda, but it was far from the only suggestion. He talked about releasing strategic oil reserves, and he even mentioned the possibility of easing oil sanctions against Russia. The impact was imminent. The S&P 500, which was in red most of the day ended the day +0.83%. Meanwhile, oil prices collapsed and are down to about $90/barrel this morning in Europe (Exhibit 2). Trump always chickens out!
Exhibit 2: Oil prices between 09/03/2026 and 10/03/2026 
Now to the most important question: What’s next?
We believe Trump is rattled because he is no longer in full control of the Republican party. The Democrats are not the only ones trying to unsettle him. From within his own party, the angry voices are getting louder, and the objective is obvious. Should the House go to the Democrats, the next two years will become a great deal more complicated on Capitol Hill. The aim is therefore to put a lid on the can of worms Trump opened by attacking Iran and, so far, Trump appears willing to follow that line.
Precisely how the Israelis will handle a US pullout remains a big question. For years, they wanted to destroy Iran, and we are pretty sure (but don’t know for certain) that, if it was up to them, what you have seen so far was only the beginning. Will they continue without the Americans, though? We doubt it and therefore think energy prices will continue to normalise – whatever that means these days!
By Niels Clemen Jensen References Note: The overnight spike between 09/03/2026 and 10/03/2026 not included Source: Bloomberg
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