Trump's Oil Price Tactic: Geopolitics and Volatility in the Middle East

The recent escalation of tensions in the Middle East has sent shockwaves through the oil market.

The Yemeni Houthi militants have launched missile attacks on the southern Saudi Arabian city of Jizan, creating a second front in the conflict and further disrupting supply chains. This has driven Brent crude oil prices to surge by about 27% over the past two weeks, reaching a high of $96.78 per barrel.

However, market analysts believe that the situation may be more complex than it appears. The geopolitical consulting firm Signum has introduced a quantitative model called the 'TACO Index', which predicts that when market pressure reaches an extreme, US President Trump is likely to de-escalate policies. According to this model, such a turning point could occur as early as July 26.

The chart of Brent crude oil prices shows a strong V-shaped rebound in recent weeks, with the short-term moving average crossing above the long-term moving average. This indicates extremely strong bullish momentum and market sentiment has shifted from pessimistic to optimistic. However, analysts warn that if Trump does not opt for negotiations, a price pullback to around $92.79 could be expected.