Iran’s Most Powerful Weapon? Keeping the Market Guessing

T he United States is fighting on two fronts in the war against Iran. One is in the skies. The other is in the market. Washington is winning the first. Tehran knows its best chance lies in the second.

Much has been made of Iran’s asymmetric drone advantage — cheap, unmanned systems that strain the capacity of conventional air defenses. But there is another asymmetry at work, one that has received far too little attention: Iran’s ability to undermine American economic messaging with nothing more than a denial.

This past Monday morning offered the clearest example yet. President Donald Trump announced that the United States and Iran held productive talks over the weekend, leading him to instruct the Pentagon to postpone strikes on Iranian energy infrastructure for five days. Markets responded positively, expecting that talks with Iran could help open the Strait of Hormuz, which has remained closed to most commercial traffic since the war began and is ordinarily the transit point for about one-quarter of seaborne oil trade and a fifth of liquefied natural gas trade. Brent crude fell below $100. Major stock indexes rallied 2 percent. European natural gas futures dropped more than 6 percent. Global bonds flipped to gains. Then Iran denied the talks ever happened — and markets noticed. Oil prices, which had fallen as much as 14 percent, increased again following Iran’s denial before resuming their fall when Trump reiterated that a deal could come within days.

While the war rages on, market stability will remain Iran’s kryptonite. Denial is therefore part of the regime’s strategy of information warfare.

The United States does not control global commodity markets. It cannot set oil prices by decree. What it can do is shape market expectations — signaling that supply will remain sufficient, that disruptions are temporary, that American sanctions will not stand in the way of stabilizing energy flows. That is the message behind the historic 400-million-barrel release from international strategic reserves and behind recent, albeit misguided, authorizations for the sale of sanctioned Iranian and Russian oil that had already been loaded in ships and was either floating in storage or transiting to its final destination.

The stakes extend far beyond the price at the pump. Supply disruptions are driving up diesel- and jet-fuel costs and could soon strain the petrochemical sector, rippling into consumer goods, fertilizer, semiconductors, and advanced manufacturing. If markets lose confidence that Washington can manage these pressures, political support for the war could erode even in congressional districts that strongly back the campaign, forcing the United States to the negotiating table before it has achieved the entirety of its objectives. Tehran’s strategy is to ensure that happens. Denying messages of market stability is central to that effort.

When Treasury Secretary Scott Bessent signaled last week that the United States would authorize the sale of 140 million barrels of sanctioned Iranian crude, Iran’s oil ministry spokesman Saman Ghodousi quickly responded, saying Iran has no crude oil left in floating storage and no surplus to offer the market. In reality, estimates from Goldman Sachs and analytics firm Kpler put the figure at between approximately 100 million and 170 million barrels on the water. For Iran, the framing was simple: If there is no oil on the water, there is no relief for the market to price in.

The timing of Ghodousi’s remark was particularly important, since Iran had just attacked energy facilities across the Middle East. Brent crude settled Friday at $112 a barrel — its highest close since July 2022 — despite Bessent’s announcement.

Iran’s denial of productive talks over the weekend follows the same playbook. Tehran’s foreign ministry said there had been no contact with Washington, direct or indirect. Reporting suggests otherwise: Turkey, Egypt, and Pakistan appear to have served as intermediaries, with all three countries’ foreign ministers holding separate conversations with White House envoy Steve Witkoff and Iranian Foreign Minister Abbas Araghchi over the preceding days.

Notice the pattern: Washington signals stability while Tehran undermines it.

Compare this with Russia. Whereas Iran denies having any oil to supply the market, Russia is promoting all that it can offer. This is because Moscow and Tehran are exploiting the same American policy — the decision to “unsanction” oil at sea — for opposite ends. What’s most important for Russia is generating more revenue so it can keep fighting. What’s most important for Iran, however, is promoting market panic so the United States can no longer afford to, politically.

Policymakers and market participants should recognize Tehran’s denials for what they are: a deliberate strategy to weaponize uncertainty. In a conflict where global energy prices, bond yields, and consumer confidence are all in play, Washington must do more to prepare for battles over market messaging. The United States doesn’t just need to defeat Iran militarily. It must win in the global market, where much lies beyond Washington’s direct control.