【TMGM Financial Recap】Oil Prices Rise as Trump Cancels Vance’s Talks!

Iranian funds worth hundreds of billions of dollars and control of the strait formed Trump’s stated case for dispensing with an agreement. Writing on Truth Social on 12 November, he said: “We don’t need a deal with Iran. Those days are long gone. We have hundreds of billions of dollars of their money, and we control their strait.” At much the same time, Vice President Vance was told to direct his “full attention” towards inquiries into “corruption and crime” in Democrat-led cities and states.

The diplomatic position a day earlier had been markedly different. The Wall Street Journal had reported that Vance was considering meeting Rezaei, secretary of Iran’s Supreme National Security Council, in person to help end the war. Having been “open to” Vance reopening negotiations, Trump had authorised him to proceed. The gap between “authorized to negotiate” and “we don’t need a deal” was less than 48 hours.

Trump Changes Course Three Times in One Week

A heavy Republican defeat in the midterm elections on 4 November prompted a lengthy statement from Vance that same day. His conclusion was explicit: “The root cause of our election defeat was this war.” What followed went beyond a standard electoral post-mortem. Of the four priorities he proposed for restoring the Republican Party’s fortunes, “ending the war with Iran” came first; he also advocated “changes to the U.S.–Israel relationship.” In a party under Trump’s dominance, a vice president blaming an ongoing war for the electoral defeat while setting out a separate policy agenda was an unusual intervention. U.S. media characterised it as “undisguised criticism” and an attempt to “distance himself from Trump.”

A firm line from Trump followed on 5 November. The United States, he said, would determine whether additional strikes on Iran were required to achieve the “complete elimination of Iran’s nuclear program.”

By 8–9 November, a more conciliatory message had emerged. With negotiations progressing, Trump said a resumption of large-scale military operations by the United States was “highly unlikely”. He described an Iran agreement as “close”, saying there was “no reason” to intensify the conflict. After talks with Qatar’s prime minister on 9 November, he judged further military action “quite unlikely” and described the war as “effectively over from a military standpoint.”

On 12 November, the message changed again: “We don’t need a deal.” Read from the starting point of Vance’s public distancing, these three changes suggest a common purpose. Trump needs the Iran war to cease being a domestic political burden, but wants to retain control of policy rather than let Vance set its course. The hard line of 5 November rebuffed Vance’s “end the war” framing. Calling the war “effectively over” on 8–9 November then advanced in the same direction, without conceding that Vance had persuaded him. Finally, the 12 November assertion that an agreement was unnecessary shut down negotiations before Vance could secure political credit for brokering one.

Trump Presents Existing Leverage as a Substitute for a Deal

The reasoning Trump offered on Truth Social merits scrutiny, particularly his assertion: “We have hundreds of billions of dollars of their money, and we control their strait.”

The factual picture is less clear-cut than that claim suggests. Substantial Iranian assets abroad have indeed been frozen by the United States, but to say it “controls the strait” is an overstatement. In October, commercial vessels in the Strait of Hormuz suffered 36 attacks, the largest monthly number since the war started. On 12 November, two tankers hit mines in the exclusion zone and caught fire. Neither side has complete command of the strait: it is contested, not “under control.”

As a statement of strategy, by contrast, the argument is coherent on its own terms. In Trump’s view, frozen funds, the naval blockade and economic pressure already give the United States enough leverage to impose costs on Iran. An agreement offering sanctions relief in return for relinquishing its nuclear programme is therefore unnecessary.

The approach follows directly from “neither fighting nor negotiating.” Declining marginal returns from military strikes explain the decision not to fight. A Xinhua analysis observed that “destroying Iran’s military capabilities is unlikely to force it to accept U.S. political conditions, while maintaining maritime and land blockades offers an alternative means of applying economic pressure.” The refusal to negotiate has a separate rationale: talks would require concessions, including unfreezing funds and ending the blockade, which Trump sees as avoidable costs.

An earlier framework mediated by Qatar and other countries had laid bare the main sticking point. Before Iran would admit inspectors to its nuclear facilities or reopen the strait, the United States would have to lift the blockade and release a portion of the frozen funds. The proposed order was thus “the United States pays first, and Iran delivers later.” In essence, Trump’s message on 12 November rejected that sequencing. His answer was to abandon the agreement, not put forward a counteroffer.

Vance Loses His Diplomatic Platform but Retains a Policy Divide

Being stopped from negotiating does not fully capture Vance’s position in this contest. Consider the scope of his 4 November statement: rather than simply reviewing an election defeat, he blamed a continuing war and put forward his own policy agenda, including “changing the U.S.–Israel relationship.” That departure mattered in a system where vice presidents usually refrain from criticising presidential policy in public. U.S. media saw an attempt to “distance himself from Trump and position himself for a presidential run in 2028.”

Rather than publicly dispute Vance’s judgement on the war, Trump acted against his role. His statements in the days that followed, describing the war as “effectively over”, in fact accepted the direction Vance’s assessment implied. The intervention was instead to strip Vance of the negotiating brief, remove him from diplomacy and put him in charge of domestic corruption and crime investigations. Such an assignment expends political capital without offering a diplomatic accomplishment in return.

The opportunity to build a national political profile through negotiations has therefore disappeared for Vance. Yet the “end the war” message he directed at the Republican grassroots remains unrepudiated. Trump has endorsed the policy direction while rejecting its prospective executor. As a result, Iran policy still offers Vance a way to differentiate himself from Trump in the 2028 Republican presidential primaries.

Oil Rebuilds Its Risk Premium as Gold Falls

A 3.3% rise took Brent crude to a closing price of $95.82, while WTI advanced 2.55% to $88.74. Gold moved the other way: spot prices dropped through $3,900 and were down as much as 2.8% during trading.

Renewed pricing of geopolitical risk was the immediate force behind oil’s gains. Until Trump spoke, the prospect of peace had been gaining weight in markets. Brent, having hit a six-month high in late October, had been set for a second weekly decline in succession. That reflected, in part, “some recovery in Middle Eastern oil flows” and “hopes that the Democrats’ midterm election victory would accelerate an end to the conflict.” Once Trump’s remarks dispelled expectations of a near-term agreement, some of the geopolitical premium previously taken out of oil prices was priced back in.

That does not make the oil-price effects of “neither fighting nor negotiating” equivalent to those of a widening war. CFi.cn’s analysis put a limit on the comparison: “The likelihood of a geopolitical premium continuing to build to more than $20, as it did in October, is very small.” Escalation risk can send prices higher; attrition without either fighting or talks instead imposes a persistent structural restriction on supply, rather than an abrupt disruption. It cannot sustain an indefinite surge in oil, but it does take away the downward impetus that expectations of a peace deal had provided.

For gold, a different set of forces explains the fall. The existence of conflict alone has never determined its price; real interest rates and demand for safe havens work together. In a framework of “neither fighting nor negotiating”, military escalation ceases to be a tail risk, while drawn-out economic attrition delivers no immediate shock to the global financial system. The safe-haven premium linked to an intensifying war consequently falls away. Structurally higher oil prices could nevertheless keep inflation more persistent, potentially supporting gold over the longer term. That support develops only with time, whereas the loss of the escalation premium is immediate.

The Strategy of “Neither Fighting Nor Negotiating” Remains Highly Fragile

A policy of pressure with “no end date” leaves a moderate but lasting geopolitical premium in oil prices. Even if that premium does not precipitate a crisis, its effect on petrol prices will shape voters’ views of living costs. Those costs are precisely what have just lost Republicans the midterm elections. Among the four priorities in Vance’s 4 November statement was “focusing on the public’s cost of living and inflation”. Removing him from negotiations has not removed the issue’s political potency.

Should the strategy keep oil prices above levels voters regard as comfortable in the months ahead, a Congress controlled by Democrats will have strong incentives to pursue the issue. Investigations and hearings could repeatedly centre on the argument that “the president’s refusal to negotiate is keeping oil prices high”. What began as an assertion of strength, “we don’t need a deal”, would then become a political burden that needs continual defending.

Conditions in the Strait of Hormuz present a further weakness. Against Trump’s claim to “control the strait,” stand October’s 36 attacks on commercial vessels and the tankers that hit mines and caught fire on 12 November. These incidents demonstrate that declaring the United States “doesn’t need a deal” has not reduced the cost of protecting passage. If Iran keeps probing shipping security through low-intensity measures, including mines, small-boat harassment and GPS interference, Washington will have two options under this framework. It can intensify its military response and return to fighting, or tolerate continued shipping losses and absorb the economic cost of refusing talks. Either choice brings back the political burden Trump is now seeking to escape.

The appearance of stalemate in “Neither fighting nor negotiating” reflects the reality. This is, however, a deadlock Trump has deliberately selected, not one that has trapped him. Buying time preserves his room for manoeuvre. His wager is that the Iranian economy will buckle before American voters’ patience runs out.