Trump Signals Willingness to End Iran War Without Hormuz
WSJ reports the president told aides he would accept ending the military campaign even if the Strait remains closed, pushing futures higher Monday.
President Donald Trump has told aides he is willing to end the U.S. military campaign against Iran even if the Strait of Hormuz remains largely closed, according to a Wall Street Journal report that sent futures higher Monday morning.
The shift represents a significant change in the administration's stated objectives. When strikes began on February 28, White House officials insisted the campaign would continue until Iran reopened the strategic waterway. Now it appears Trump is looking for an exit.
S&P 500 futures jumped 0.9% on the report. The Dow rose over 1%. Oil prices swung between gains and losses as traders parsed the implications.
The Strategic Calculus
Trump's first option remains negotiating an end to the conflict that includes reopening Hormuz, the Journal reported. But if that fails, a second option would have the U.S. demand that Gulf States and NATO allies lead the operation to clear the Strait—shifting the military burden while claiming diplomatic victory.
This is recognition of a difficult reality. The Hormuz blockade has removed roughly 20% of global seaborne oil from normal transit routes. Tanker traffic through the Strait is down 74% from pre-conflict levels. The ships still transiting are mostly Chinese, Indian, and Russian-flagged vessels carrying oil to non-coalition countries.
Breaking the blockade would require a sustained military operation. Iran has mined the approaches, deployed anti-ship missiles on both shores, and stationed fast attack boats throughout the area. The U.S. Navy has the capability, but the cost in ships, sailors, and escalation risk is substantial.
Market Reaction
The initial reaction was positive but cautious. A month of Iran-driven volatility has taught traders to expect headlines that move in both directions.
Brent crude actually rose on Monday despite the de-escalation talk, settling near $113. The oil market has learned that presidential optimism doesn't always translate into actual progress. Previous reports of "productive talks" and submitted ceasefire plans produced rallies that reversed within days.
Equities are in a different position. The VIX remains elevated above 30, and the S&P 500 is coming off its worst month since 2022. Any path toward de-escalation, even a partial one, reduces the tail risk that has been compressing valuations.
What It Would Mean
If the U.S. does accept a closed or partially closed Hormuz, the economic implications are significant.
Oil prices would likely remain elevated, though below crisis peaks. The current $112 Brent price assumes some probability of eventual reopening. If markets concluded the blockade is semi-permanent, a new equilibrium might settle between $90-$100.
Global supply chains would need to adapt. Tankers would continue routing around Africa, adding weeks and billions in shipping costs. Importers in Japan, South Korea, and Europe would pay premium prices for non-Gulf crude.
American consumers would face sustained gasoline prices above $4 per gallon. That's politically uncomfortable heading into midterm elections, which may explain Trump's apparent willingness to consider a deal that doesn't fully restore pre-war conditions.
The Iranian Perspective
Iran has shown no public interest in any U.S. proposal so far. Supreme Leader Mojtaba Khamenei's government rejected the 15-point ceasefire plan last week and responded by declaring an expanded security zone across Hormuz.
Tehran believes time is on its side. Every week the Strait stays closed raises American political pressure to negotiate. The economic pain falls disproportionately on U.S. allies in Europe and Asia, creating wedge opportunities for Iranian diplomacy.
Whether Trump's private comments reflect genuine flexibility or negotiating posture is unclear. The administration has whipsawed between hawkish military action and dovish diplomatic overtures throughout the conflict.
For markets, the pattern has been consistent: rally on peace hints, sell on escalation headlines. Monday was a rally day. Whether it lasts depends on what happens in the actual negotiations, not what anonymous officials tell reporters.
For more on the geopolitical landscape, see our Economy coverage.