【TMGM Financial Recap】Trump Calls Off Vance’s Talks, Sending Oil Prices Higher!

On November 12, Trump wrote on Truth Social: “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.” Almost simultaneously, he instructed Vice President Vance to devote his “full attention” to investigating “corruption and crime” in cities and states governed by Democrats.

Just one day earlier, The Wall Street Journal had reported that Vance was considering a face-to-face meeting with Rezaei, secretary of Iran’s Supreme National Security Council, to help bring the war to an end. Trump had previously been “open to” Vance restarting negotiations and had authorized him to proceed. Less than 48 hours separated “authorized to negotiate” from “we don’t need a deal.”

Three Shifts in One Week

On November 4, Republicans suffered a crushing defeat in the midterm elections. Vance published a lengthy statement that day, declaring bluntly: “The root cause of our election defeat was this war.” This was no ordinary post-election assessment. Vance outlined four priorities for getting the Republican Party back on track, placing “ending the war with Iran” first and also calling for “changes to the U.S.–Israel relationship.” Within a Republican Party dominated by Trump, the vice president publicly identifying an ongoing war as the fundamental cause of electoral defeat—and offering a policy agenda distinct from the president’s—was interpreted by U.S. media as “undisguised criticism” and an attempt to “distance himself from Trump.”

Trump’s response on November 5 was forceful: he said the United States would decide whether to launch further strikes against Iran to ensure the “complete elimination of Iran’s nuclear program.”

A shift followed on November 8–9. Trump changed his tone, saying the United States was “highly unlikely” to resume large-scale military operations as long as negotiations were making progress. He said a deal with Iran was “close” and that there was “no reason” to escalate the conflict. After meeting Qatar’s prime minister on November 9, he said renewed military action was “quite unlikely” and that the war was “effectively over from a military standpoint.”

Then came the November 12 declaration: “We don’t need a deal.” If Vance’s public distancing is taken as the starting point of this sequence, Trump’s three shifts suggest a consistent explanation: he needs to remove the Iran war as a domestic political liability without allowing Vance to define the policy direction. His tough stance on November 5 rejected Vance’s “end the war” framing. His November 8–9 declaration that the war was “effectively over” moved in the same direction without acknowledging that Vance had persuaded him. His November 12 statement that no deal was needed canceled the negotiations just before Vance could gain political credit as the negotiator.

What “We Don’t Need a Deal” Really Means

Trump’s justification on Truth Social deserves a close reading. He said: “We have hundreds of billions of dollars of their money, and we control their strait.”

Factually, this statement needs qualification. The United States has indeed frozen substantial Iranian assets overseas. However, the claim that it “controls the strait” overstates the situation. Attacks on commercial vessels in the Strait of Hormuz reached 36 in October, the highest monthly total since the war began. On November 12 itself, two tankers struck mines and caught fire in the exclusion zone. The strait is far from being “under control.” It remains contested, with neither side able to exercise complete control.

Strategically, however, the statement is internally consistent. Trump’s logic is that the leverage the United States already holds—frozen funds, a naval blockade, and economic pressure—is sufficient to impose costs on Iran. There is therefore no need to negotiate an agreement exchanging sanctions relief for the abandonment of its nuclear program.

This fits precisely with a strategy of “neither fighting nor negotiating.” There is no fighting because the marginal returns from military strikes are diminishing. As a Xinhua analysis noted, “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.” There are no negotiations because talks require concessions, such as unfreezing funds and lifting the blockade, which Trump considers unnecessary costs.

The framework previously mediated by Qatar and other countries had already exposed the central obstacle: only after the United States lifted the blockade and released some frozen funds would Iran invite inspectors to its nuclear facilities and reopen the strait. This is a sequence in which “the United States pays first, and Iran delivers later.” Trump’s November 12 statement essentially said: I do not accept that sequence, and my response is to walk away from the deal rather than make a counteroffer.

Vance’s Position

Vance’s role in this struggle is more complicated than simply having his negotiations halted by the president. His lengthy November 4 statement was no routine reflection on an election defeat. In a political system where vice presidents generally avoid publicly criticizing presidential policy, he blamed an ongoing war for the election loss and proposed an independent policy agenda that included “changing the U.S.–Israel relationship.” U.S. media interpreted this as an effort to “distance himself from Trump and position himself for a presidential run in 2028.”

Trump’s response was carefully targeted. He did not publicly challenge Vance’s assessment of the war. In fact, over the following days, he accepted the direction implied by declaring that the war was “effectively over.” What he did was remove Vance from the role of negotiator, take him off the diplomatic stage, and reassign him to domestic investigations into corruption and crime. This is a task that consumes political capital while offering no diplomatic achievement.

Vance has lost a negotiating platform that could have helped him build national political standing, but his “end the war” message to the Republican grassroots has not been repudiated. Trump accepted the direction while rejecting the person who would carry it out. This means Iran policy remains an issue Vance can use to distinguish himself from Trump in the 2028 Republican presidential primaries.

What Markets Priced In

The market reaction was clear: Brent crude closed 3.3% higher at $95.82, while WTI rose 2.55% to $88.74. Spot gold fell below $3,900, with losses reaching 2.8% at one point.

The immediate mechanism behind the oil rally was the return of a geopolitical risk premium. Before Trump’s remarks, markets had been pricing in the prospect of peace. After reaching a six-month high in late October, Brent was heading for a second consecutive weekly decline, driven partly by “some recovery in Middle Eastern oil flows” and “hopes that the Democrats’ midterm election victory would accelerate an end to the conflict.” Trump’s statement removed the expectation that a deal was imminent, prompting oil prices to restore part of the geopolitical premium that had previously been unwound.

However, the impact of “neither fighting nor negotiating” on oil prices differs fundamentally from that of an escalation in the war. An analysis by CFi.cn offered an important qualification: “The likelihood of a geopolitical premium continuing to build to more than $20, as it did in October, is very small.” The risk of escalation can drive oil prices higher, but a strategy of attrition based on neither fighting nor negotiating creates a steady, structural supply constraint rather than a sudden supply disruption. Such a strategy will not keep oil prices surging indefinitely, but it removes the downward catalyst previously provided by expectations of a peace agreement.

Gold’s decline followed a different logic. Gold pricing has never depended simply on whether a conflict exists, but on the combination of real interest rates and safe-haven demand. Under the “neither fighting nor negotiating” framework, the tail risk of military escalation is removed, while prolonged economic attrition does not create an immediate shock to the global financial system. Gold loses the safe-haven premium associated with an escalation in the war, while gaining potential longer-term support from inflation remaining more persistent because of structurally elevated oil prices. The latter takes time to materialize; the former disappears immediately.

“Neither Fighting Nor Negotiating” Is Extremely Fragile

Pressure with “no end date” means oil prices will carry a persistent, moderate geopolitical premium. That premium may not trigger a crisis, but it will feed through gasoline prices into voters’ perceptions of the cost of living. And the cost of living is precisely the issue that has just cost Republicans the midterm elections. In his November 4 statement, Vance listed “focusing on the public’s cost of living and inflation” as one of his four priorities. Trump has canceled Vance’s negotiating role, but he has not erased the issue’s political force.

If oil prices fail to return to levels voters find comfortable over the coming months because this strategy persists, a Democratic-controlled Congress will have ample incentive to make “the president’s refusal to negotiate is keeping oil prices high” an ongoing theme of investigations and hearings. At that point, “we don’t need a deal” will shift from a declaration of strength to a political liability requiring constant defense.

Another vulnerability lies in the actual situation in the Strait of Hormuz. Trump claims to “control the strait,” but the 36 attacks on commercial vessels in October and the tanker mine strikes and fires on November 12 show that the costs of maintaining safe passage have not fallen simply because the United States “doesn’t need a deal.” If Iran continues testing shipping security through low-intensity actions—mines, harassment by small boats, and GPS interference—under this framework, the United States will face a choice: escalate its military response, returning to the option of fighting, or accept a shipping environment marked by continuing losses and bear the economic costs of refusing to negotiate. Both paths lead to the political burden Trump is currently trying to avoid.

“Neither fighting nor negotiating” looks like a stalemate because it is one. But it is a stalemate Trump has actively chosen, rather than one in which he has become trapped. He is buying time to preserve room to maneuver, betting that Iran’s economy will give way before American voters lose patience.