Avash News: As tensions between the United States and Iran have escalated and transit through the Strait of Hormuz remains limited, oil and the dollar have been following a new pattern unlike the traditional one. They are rising together and falling together, increasing volatility and uncertainty in the markets.
Why Has This Become an Important Issue?
For years, it was believed that a strong dollar usually put pressure on oil prices, while expensive oil weakened the growth of the dollar and high-risk assets.
But in the 2026 market, this simple picture has changed. New reports show that the 60-day correlation between the US dollar and Brent crude has reached an unprecedented level compared to recorded data since 2005. At the same time, Reuters and CNBC have reported sharp jumps and intense fluctuations in oil prices following the US war against Iran and remarks made by Donald Trump.
This is not just a short-term fluctuation. Behind it lies a combination of supply shocks, geopolitical risks, inflation concerns, and changing expectations regarding interest rates. As a result, the issue of expensive oil has gone beyond the energy sector and reached the political core of the US economy.
A Relationship That Has Changed
Under the classical logic of the market, oil and the dollar traditionally had an inverse relationship. When the dollar strengthened, oil became more expensive for consumers using other currencies, demand weakened, and pressure on the global economy increased. As a result, the dollar itself often fluctuated.
However, the European Central Bank explained in its latest report that this relationship has become more complicated in recent years, particularly after the US became a net exporter of energy in 2019. Since then, new dynamics have emerged that have affected the current market environment.
Still, the European Central Bank does not explicitly state that a new and stable pattern has formed. A more accurate interpretation is that markets are currently moving under multiple simultaneous shocks, including tight monetary policy, war, concerns over supply shortages, and changes in the US energy position. As a result, the fact that the dollar and oil are moving together appears to be more of an abnormality than a permanent and reliable trend.
What Does Trump Want?
Trump is concerned about expensive oil because high oil prices usually lead to higher gasoline prices, rising inflation, and greater public dissatisfaction. In the United States, fuel prices are among the most visible indicators of inflation for voters, meaning that any upward wave in oil prices carries an immediate political cost.
For a politician like Trump, who relies heavily on the image of a strong economy, this creates significant pressure.
The issue is also clear from a financial perspective. If oil prices rise and inflation accelerates again, the Federal Reserve will likely become more cautious about cutting interest rates. This is exactly where the interests of the administration, the markets, and politics diverge: Trump wants lower interest rates, but expensive oil — accompanied by a stronger dollar — could make that path much more difficult.
The Strait of Hormuz and Global Pressure
The Strait of Hormuz is not just another point on the global energy map. It is one of the world’s most important oil chokepoints, and any threat to it can immediately push prices higher.
Reuters and other media outlets reported several times during the spring of 2026 that rising tensions around Iran and the Strait of Hormuz could trigger a jump in oil prices and push markets into a defensive mode.
Reuters also noted that while the closure of the Strait of Hormuz could significantly increase inflation, its long-term impact on inflation expectations might remain more limited.
This is an important point: although an energy shock may initially appear temporary, in practice it can alter the course of monetary policy and market behavior for months.
Why Are Markets Nervous?
When oil and the dollar rise simultaneously, markets receive the same message: cost pressures are increasing. This pressure can fuel inflation and potentially force the Federal Reserve to delay interest-rate cuts.
Such conditions usually put pressure on stocks, increase caution in cryptocurrency markets, and drive investors toward lower-risk assets.
Reuters has also reported that markets remain highly sensitive to the Iran crisis and its potential impact on oil supply. CNBC likewise reported sharp declines in oil prices following remarks made by Trump. However, these fluctuations themselves demonstrate that the market has not yet reached stability.
As long as markets remain in such a fragile state, even a single political statement can trigger a new wave of buying or selling.
