Trump draws two red lines on Iran but keeps Pickaxe Mountain strike in play

The remarks are unlikely to move oil much on their own, since they repeat earlier positions, but they reinforce the geopolitical risk premium in crude by keeping a strike on Iran’s remaining nuclear infrastructure on the table. The real oil risk lies in Hormuz: any escalation that triggers further Iranian attacks on tankers would tighten already constrained flows and push prices back above $100. Ruling out nuclear weapons and ground troops slightly reduces tail risk, while Trump’s pre-midterm pause offers near-term breathing room. As throughout the conflict, higher oil feeds inflation and Fed hike expectations, which has weighed on gold rather than lifting it.-- Trump has taken nukes and boots off the table, but not the bombers, and for oil traders the mountain near Natanz is still on the map.Summary:Trump told Newsmax he would not use nuclear weapons on Iran and does not see US troops on the ground thereHe said the US may have to go after Pickaxe Mountain, an underground site near Natanz linked to Iran’s nuclear programmeHe said he is talking to Russia and China about denuclearisation, without giving detailsLast week, Trump said the US would not attack Iran before the November midtermsCBS News has reported US plans to use a massive conventional bomb against Iranian military sites if orderedHormuz disruption and tanker attacks keep US crude near $97, despite accelerated IEA stock releases US President Donald Trump said he would not use nuclear weapons against Iran and did not expect to send ground troops into the country. He kept open the possibility of a strike on Pickaxe Mountain, the underground site near Natanz that analysts link to Iran’s nuclear programme.Speaking in an interview with Newsmax, Trump said the US may have to go after Pickaxe Mountain. He also said he was talking to Russia and China about denuclearisation, though he gave no detail on those discussions.Pickaxe Mountain, known in Iran as Kuh-e Kolang, is a complex of tunnels built into a mountain a few miles from Natanz. Iran declared it a centrifuge assembly site in 2021, and analysts estimate it is buried about 100 metres underground. It is widely described as the last significant nuclear-linked site in Iran to have escaped strikes, and Trump has repeatedly threatened to hit it since July. Analysts have cautioned that even the heaviest US bunker-busting bombs may not guarantee its destruction.The comments add to mixed signals from Washington. Last week Trump said the US would not attack Iran before the midterm elections in early November and pointed to productive conversations with Tehran. At the same time, CBS News has reported that the White House and Pentagon have prepared plans to use one of the largest US conventional bombs against military sites in Iran, should the president order it. Ruling out nuclear weapons and ground troops narrows the range of options, but leaves air strikes on the table.For energy markets, the key question is what any escalation would mean for the Strait of Hormuz, through which a large share of the world’s oil normally passes. Traffic through the strait has been severely disrupted during the conflict, and Iranian attacks on tankers have increased in recent weeks. US crude traded near $97 a barrel on Thursday, close to the $100 mark. Supply concerns kept prices elevated despite moves by IEA members to speed up releases of emergency oil stocks.The remarks are unlikely to shift oil prices much on their own, since they largely restate positions Trump has taken before. But they suggest a strike on Iran’s remaining nuclear infrastructure remains a live option once the pre-election pause ends, keeping a geopolitical risk premium in crude.The next markers will be any sign of progress in contacts with Tehran before the midterms, further attacks on shipping in Hormuz, and whether Washington’s stated pause holds.  This article was written by Eamonn Sheridan at investinglive.com.