In a week marked by war shocks and extreme energy volatility, Bitcoin (BTC) made a dramatic recovery to reclaim the $71,000 level as tensions in the Middle East continue to weigh on equities. Meanwhile, oil prices are edging higher amid concerns of a prolonged conflict between the U.S., Israel, and Iran.
With fears growing over the economic impact of surging oil costs, a result of disruptions in the Strait of Hormuz – a shipping corridor that handles roughly one-fifth of global oil shipments – U.S. Treasury Secretary Scott Bessent said Thursday that the Trump administration is taking steps to neutralize the situation.
Oil Prices Surge as Trump Vows to Block Iran Nuclear Ambitions
“Operation Epic Fury,” a joint military operation between Washington and Tel Aviv against Tehran, had paralyzed the global risk appetite for much of March. Iran’s retaliation with missile strikes and drone attacks on U.S. assets across the Middle East, and threats to block the Strait of Hormuz, sent the global oil benchmark – Brent Crude – toward $120 per barrel. This geopolitical anomaly also dragged BTC down below $65,000 as investors fled to traditional safe-haven assets like gold and cash.
President Donald Trump reiterated that stopping Iran from acquiring nuclear weapons was a bigger priority for the U.S. than controlling oil prices. He wrote in a Truth Social post:
“The United States is the largest oil producer in the world, by far, so when oil prices go up, we make a lot of money. BUT, of far greater interest and importance to me, as President, is stopping an evil Empire, Iran, from having nuclear weapons.”
This comment sent Brent crude futures higher by 9.2%, closing above $100 per barrel for the first time since the Russia-Ukraine war started in early 2022. It also marked the largest single-day pump for the benchmark since around the start of the COVID-19 pandemic in May 2020. The move led the already slumping U.S. stock market to sharp losses.
U.S. Waives Russian Oil Ban as IEA Releases 400M Barrels
But the tide turned when Bessent announced a multi-faceted strategy to stabilize energy prices. Central to this plan is the International Energy Agency (IEA) announcing a record-breaking release of 400 million barrels of oil from its members’ strategic reserves, with the U.S. contributing 172 million barrels.
Furthermore, the Treasury Secretary has issued a 30-day waiver allowing countries, specifically India, to purchase Russian oil currently stranded at sea. He clarified that the “narrowly tailored, short-term measure” applies only to oil already in transit and will not provide any significant financial benefits to Moscow.
“The temporary increase in oil prices is a short-term and temporary disruption that will result in a massive benefit to our nation and economy in the long-term,” Bessent said, suggesting that market fears about the rise in oil prices were overblown.
He later stated in a Sky News interview that the U.S. Navy is likely to coordinate with an international coalition to begin escorting oil tankers through the Strait of Hormuz soon to ensure the free flow of energy.
Bessent’s posts and subsequent comments helped bitcoin, which had been holding on to the $70,000 level throughout most of the day, jump to around $72,000. Meanwhile, West Texas Intermediate (WTI) crude pulled back to about $95.22 per barrel.
BTC Gains as Oil Slips; Market Eyes Upcoming Fed Decision
BTC became the primary benefactor of retreating oil prices and the fading of the immediate threat of a global energy blockade in a massive relief rally. Analysts observed that while equities remain volatile, the “digital gold” acted as a more sensitive barometer for the war de-escalation premium.
The markets have now turned their attention toward the March 17-18 Federal Reserve meeting. While the Trump administration’s oil waivers and reserve releases have temporarily quelled economic fears, traders remain cautious. Bitcoin’s ability to hold on to its current range depends on whether the U.S. central bank interprets the energy-driven price spikes as a transitory geopolitical event or a reason to tighten interest rates further.
At the time of writing, Bitcoin (BTC) is trading at $71,235 – up 2.44% in 24 hours.
