【TMGM Financial Recap】Oil Moves Higher on Trump’s Cancellation of Vance’s Talks!

12 November brought Trump’s rejection of an Iran deal. His Truth Social post stated: “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.” He also directed Vice President Vance, almost simultaneously, to focus his “full attention” on investigating “corruption and crime” in cities and states run by Democrats.

Only the previous day, a possible diplomatic opening had been reported by The Wall Street Journal. Vance was considering direct talks with Rezaei, secretary of Iran’s Supreme National Security Council, to help end the war. Trump had earlier authorised Vance to proceed, having been “open to” his resuming negotiations. The reversal from “authorized to negotiate” to “we don’t need a deal” occurred in less than 48 hours.

One Week, Three Policy Reversals

The Republicans’ severe midterm election loss on 4 November drew an unusually direct intervention from Vance that day. In an extended statement, he declared: “The root cause of our election defeat was this war.” His response was not confined to assessing the result. He proposed four priorities for putting the Republican Party back on track, led by “ending the war with Iran” and including “changes to the U.S.–Israel relationship.” With Trump dominating the Republican Party, the vice president had both blamed a continuing war for the defeat and presented an agenda different from the president’s. U.S. media described the intervention as “undisguised criticism” and an attempt to “distance himself from Trump.”

Further attacks on Iran remained an option in Trump’s robust reply on 5 November. He said the United States would judge whether more strikes were needed to ensure the “complete elimination of Iran’s nuclear program.”

By 8–9 November, that message had given way to a softer position. Progress in negotiations would make a resumption of large-scale military operations by the United States “highly unlikely”, Trump said. He called an Iran deal “close” and saw “no reason” to escalate. His comments after meeting Qatar’s prime minister on 9 November went further: renewed military action was “quite unlikely”, and the war was “effectively over from a military standpoint.”

The 12 November announcement reversed course once more: “We don’t need a deal.” Starting with Vance’s public distancing, the sequence points to a consistent rationale for Trump’s three shifts. He needs to shed the domestic political burden of the Iran war while denying Vance control over policy. On 5 November, the hard-line response countered Vance’s “end the war” position. On 8–9 November, describing the conflict as “effectively over” followed that direction without crediting Vance with changing his mind. On 12 November, ruling out the need for a deal terminated negotiations before Vance could earn political credit for conducting them.

No Iran Deal: Trump’s Leverage Calculation

The key to Trump’s reasoning lies in his Truth Social claim, which warrants scrutiny: “We have hundreds of billions of dollars of their money, and we control their strait.”

The facts do not fully support that account. Washington has frozen substantial Iranian assets overseas, but its claim that it “controls the strait” exaggerates its position. October recorded 36 attacks on commercial vessels in the Strait of Hormuz, more than any other month since the war began. Two tankers also hit mines and caught fire within the exclusion zone on 12 November. These are not conditions that can be described as “under control.” The waterway is still contested, and complete control eludes both sides.

The strategic reasoning, however, holds together on its own terms. Trump considers existing U.S. leverage sufficient to impose costs on Iran: frozen funds, a naval blockade and economic pressure. From that perspective, negotiating sanctions relief in exchange for Iran giving up its nuclear programme serves no necessary purpose.

A strategy of “neither fighting nor negotiating” follows from that calculation. Further military strikes yield diminishing marginal returns, which explains the decision not to fight. Xinhua’s analysis noted 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.” Avoiding negotiations has a different basis. Talks would involve concessions, such as releasing frozen funds and removing the blockade, that Trump regards as unnecessary costs.

The core obstacle was already evident in the earlier framework brokered by Qatar and other countries. Lifting the U.S. blockade and releasing some frozen funds would come first; only then would Iran admit inspectors to its nuclear facilities and reopen the strait. That arrangement meant “the United States pays first, and Iran delivers later.” Trump’s 12 November statement amounted to refusing those terms of sequencing. Instead of proposing a counteroffer, he chose to abandon the deal.

2028: Vance Retains an Iran Policy Dividing Line

The president’s decision to halt talks captures only part of Vance’s place in this struggle. His long statement on 4 November crossed the boundaries of a routine election review. Public criticism of presidential policy is generally avoided by vice presidents in this political system. Vance nevertheless blamed the election loss on a war still in progress and offered his own policy agenda, including “changing the U.S.–Israel relationship.” U.S. media understood this as a bid to “distance himself from Trump and position himself for a presidential run in 2028.”

Trump targeted Vance’s responsibilities rather than openly contesting his judgement of the war. Indeed, his subsequent description of the conflict as “effectively over” accepted the direction implied by that judgement. The practical response was to end Vance’s negotiating role, remove him from diplomacy and redirect him to domestic corruption and crime investigations. That assignment absorbs political capital but offers no diplomatic achievement.

Negotiations no longer offer Vance a platform for building his national political standing. His appeal to the Republican grassroots to “end the war”, however, remains unrepudiated. Trump has accepted the policy direction but rejected Vance as its implementer. Iran policy consequently remains available to Vance as a point of differentiation from Trump in the 2028 Republican presidential primaries.

3.3% Brent Gain as Markets Reprice Iran Risk

Brent crude gained 3.3%, closing at $95.82. WTI rose 2.55% to $88.74, while spot gold slipped below $3,900 and lost as much as 2.8% at one stage. The market response was unambiguous.

Oil’s immediate support came from renewed demand for a geopolitical risk premium. Peace prospects had been influencing prices before Trump’s comments. After a six-month high in late October, Brent had been moving towards a second straight weekly decline. That reflected both “some recovery in Middle Eastern oil flows” and “hopes that the Democrats’ midterm election victory would accelerate an end to the conflict.” Trump’s rejection of an imminent deal reversed part of that pricing: oil recovered some of the geopolitical premium previously removed.

An escalating war and a policy of “neither fighting nor negotiating” have fundamentally different consequences for oil. CFi.cn’s analysis highlighted the distinction: “The likelihood of a geopolitical premium continuing to build to more than $20, as it did in October, is very small.” Escalation can push prices upwards through the threat of disruption. Attrition without combat or negotiations instead leaves supply under a sustained structural constraint, rather than causing a sudden interruption. This cannot sustain an indefinite surge in oil prices. It does, however, eliminate the downward catalyst that hopes of a peace deal had supplied.

For gold, a separate pricing mechanism explains the fall. The existence of conflict alone has never determined its price; real interest rates and safe-haven demand act together. A framework of “neither fighting nor negotiating” removes the tail risk of military escalation, while extended economic attrition produces no immediate shock to the global financial system. The safe-haven premium tied to a widening war therefore falls away. Structurally high oil prices could still make inflation more persistent, potentially supporting gold over the longer term. But that support develops slowly, whereas the lost safe-haven premium disappears at once.

No End Date: A Fragile Stalemate

Oil will retain a moderate, persistent geopolitical premium when pressure has “no end date”. A crisis need not result for that premium to matter: through petrol prices, it will shape voters’ views of living costs. Those costs are precisely what has just cost 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 Vance from negotiations has not removed the issue’s political weight for Trump.

Over the coming months, maintaining this strategy could prevent oil prices from falling to levels voters consider comfortable. If that happens, a Democratic-controlled Congress will have strong incentives to build investigations and hearings around the claim that “the president’s refusal to negotiate is keeping oil prices high”. Rather than projecting strength, “we don’t need a deal” would then become a political vulnerability demanding repeated defence.

Conditions in the Strait of Hormuz expose a further weakness. The 36 attacks on commercial vessels in October, followed by tanker mine strikes and fires on 12 November, challenge Trump’s claim to “control the strait,”. They show that declaring the United States “doesn’t need a deal” has not reduced the cost of keeping shipping safe. Continued Iranian tests of maritime security through low-intensity actions, including mines, small-boat harassment and GPS interference, would leave Washington with two options under this framework. It could intensify its military response and return to fighting. Alternatively, it could tolerate continuing shipping losses and absorb the economic costs of refusing talks. Either course recreates the political burden Trump is seeking to escape.

The appearance of stalemate under “Neither fighting nor negotiating” reflects the reality. This is not a position in which Trump has become trapped, however; it is one he has deliberately selected. Buying time preserves his room for manoeuvre. His wager is that Iran’s economy will buckle before American voters’ patience runs out.