Trump Voices Hope for Iran Deal as Saudi-Houthi Clashes Shake Oil Markets

U.S. President Donald Trump said he is hopeful that the seven-month war with Iran is nearing an end, even as fighting intensifies between Saudi Arabia and Iran-backed Houthi fighters in Yemen, rattling global energy markets.

"Well, hopefully we are towards the end of the war," Trump told reporters on Wednesday evening, according to Reuters. He added that he believes Iran wants to negotiate, stating, "They want to make a deal. We’ll see how that works out."

Regional Conflict Escalates

Trump's comments came amid a sharp escalation in a proxy conflict. Saudi aircraft have been conducting extensive air strikes in Yemen, while Houthi forces have retaliated with drone and missile attacks against key Saudi infrastructure.

A Houthi military spokesman, Yahya Saree, said the group had launched fresh strikes on the major Saudi Red Sea oil port of Yanbu and an airbase at Khamis Mushait. Saree also claimed that Saudi forces had carried out as many as 450 air strikes on Yemen this week. In response to the growing risk, the United States has tightened its travel warning for Saudi Arabia, banning government employees from traveling within 20 miles (30 km) of the Yemen border.

Oil Market Volatility

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The expansion of the conflict threatens to exacerbate a global energy shortage. The war has already disrupted shipping through the Strait of Hormuz, which previously handled about 20% of global oil and LNG. Additionally, traders fear a prolonged closure of Saudi Arabia’s East-West pipeline could cut off as much as 4% of global oil supply.

These supply fears pushed the price of Brent crude to around $108 a barrel on Wednesday, while the average U.S. retail price for diesel fuel hit a new all-time high above $6.30 a gallon. However, prices eased in early Thursday trading on reports that Saudi Arabia was offering extra crude cargoes through Oman. Brent crude futures fell to $104.59 a barrel, while U.S. West Texas Intermediate futures dropped to $101.29.

Diplomatic Context

The sustained high energy prices have become a significant political issue in the U.S. ahead of the November midterm elections. Against this backdrop, Trump is expected to meet with Gulf leaders on the sidelines of the U.N. General Assembly next week to discuss the conflict, Axios reported, citing unidentified sources.

The meeting would reportedly include leaders or foreign ministers from the Gulf Cooperation Council countries: Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Kuwait, and Oman.