Donald Trump reversed course on the Diego Garcia military base Wednesday, telling British Prime Minister Keir Starmer he is making a “big mistake” by leasing the Indian Ocean airfield, and warning it may be needed to launch strikes on Iran if nuclear talks collapse.
“Should Iran decide not to make a deal, it may be necessary for the United States to use Diego Garcia… in order to eradicate a potential attack by a highly unstable and dangerous Regime,” Trump posted on Truth Social.
“DO NOT GIVE AWAY DIEGO GARCIA!”
The comments landed just 24 hours after the State Department said it “supports the decision of the United Kingdom to proceed with its agreement with Mauritius.”
Wednesday’s post marks his third distinct position on the issue in a matter of weeks.
The Iran Context
The flip came a day after U.S.-Iran nuclear talks in Geneva produced a second meeting but little progress.
Vice President JD Vance said Iran agreed to meet again but has not acknowledged Trump’s core conditions, chief among them, zero uranium enrichment on Iranian soil.
Washington also wants Tehran’s ballistic missile program on the table. Iran has called both non-negotiable.
Earlier this year, satellite imagery confirmed at least six B-2 Spirit bombers, 30% of America’s entire stealth bomber fleet, staged at Diego Garcia, positioned to strike Iranian nuclear facilities if talks collapsed.
Trump’s post may be about keeping that option firmly open.
What Polymarket Thinks
The sharpest move is in the near term.
The odds of a US/Israel strike on Iran by February 28 have jumped from 24% to 38% in just a few hours, first on Vance’s Geneva comments, then on Trump’s Truth Social post.
Polymarket’s “US/Israel Strikes Iran By…?” market, with over $294 million in volume, now prices a strike by end of March at 62%, by June 30 at 67%, and by year-end at 74%.
Traders appear to be reading Trump’s Diego Garcia warning as operational signaling.
The Trade
A breakdown in talks may push Brent crude $5–$10 higher; sustained conflict could be more inflationary still. United States Oil Fund (NYSE:USO) and ProShares Ultra Bloomberg Crude Oil (NYSE:UCO) are the most direct vehicles.
On the defense side, Palantir Technologies (NASDAQ:PLTR) — whose Pentagon analytics contracts put it at the center of any Gulf military buildup — may be worth watching.
RTX Corp (NYSE:RTX), maker of the Tomahawk and Patriot missiles likely to be deployed in any strike scenario, is the more direct hardware play.
For longer-term exposure, Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) benefit from sustained high oil prices but face a ceiling: any deal that restores Iranian supply to market, combined with OPEC+ production increases expected in April, may cap the upside quickly.
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