Jim Cramer said on Tuesday that President Donald Trump's comments no longer positively impact oil prices as uncertainty looms over the Strait of Hormuz amid tensions between Washington and Tehran.
In a post on X, Cramer outlined the "big problem" with oil prices in recent times, saying that the prices go "down less when Trump says there is a hint of peace," but rally when "there is a rumor of war."
He then shared that oil prices could "challenge" the $119 high if there was "no peace," this time out. "All of this truce-carrot with no stick breeds higher and higher prices," Cramer said.
U.S. Treasury Secretary Scott Bessent issued a 30-day general license for countries facing oil crunches to buy Russian seaborne oil in a move that would "provide additional flexibility" in the crude oil supply chain.
On the oil front, West Texas Intermediate (WTI) crude oil declined 0.82% to $107.80/barrel at press time, while Brent crude also declined 0.37% to $110.90/barrel. The United States Oil Fund (USO) ETF, on the other hand, surged 2.46% to $152.96 at market close on Tuesday, but declined 0.63% to $152 during the after-hours session.
Recently, top analysts warned of the negative effects of the Iran war, with Mark Zandi, chief economist at Moody's Analytics, warning that surging interest rates signified rising inflation expectations. "Nothing spooks the Fed more than unmoored inflation expectations," the analyst said.
Meanwhile, Trump had earlier shared that ensuring Iran does not become a nuclear power would take precedence over the current cost-of-living woes faced by ordinary Americans amid the war. Trump has faced significant criticism of his handling of the situation in Iran, with the latest approval ratings falling to record lows.
