The U.S. and Iran are deep into a shooting war. Bombs flew this week, and Trump promised more for Thursday night.
That should send oil soaring. Instead it fell about 3% in one afternoon, all because of a single post online.
Trump wrote on Truth Social that he was calling off the strikes set for Thursday night. His reason: talks with Iran had reached the country's top leaders and won their approval.
That news pushed traders to sell. U.S. crude slid to $87.21 a barrel, and Brent, the price most of the world pays for oil, fell to $89.97.
The war did not end. One headline just made it look less likely to get worse overnight.
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The U.S. hit Iran on Wednesday, going after its radar, its communications, and its air defenses. Iran hit back fast.
It fired missiles at U.S. bases in Kuwait and Bahrain, and sent drones at U.S. ships near the coast. Bahrain says it shot the threats down, while Kuwait shut its airspace for a time.
Israel also warned of rocket launches from Lebanon toward towns in its north. The whole region spent the day bracing for more.
Trump has been piling on pressure all week. He is frustrated that Iran will not reopen the strait or give up its nuclear program.
Before he backed down, Trump floated a far bolder move. He said the U.S. could seize Iran's oil and run it the way it now runs Venezuela's.
He named Kharg Island, Iran's main oil export terminal, as a target. A threat like that alone can keep a floor under prices, even on a day when oil falls.
A war near the Persian Gulf usually sends oil sharply higher. That region ships out a big share of the world's crude.
This time the jump has stayed small. The market can take a punch better than it used to.
Rystad Energy, an oil research firm, points to three cushions. The U.S. is exporting record amounts of its own oil, and China is buying less.
More crude can also move through routes that skip the Strait of Hormuz, the narrow waterway off Iran's coast. Even so, Rystad's Jorge Leon warns the odds of a quick peace deal just got worse.
Oil now moves on every headline, from a strike to a threat to a cancelled threat. So watch whether the talks Trump mentioned turn into anything real.
If they stall, the next post could push oil right back up. For now, the market is betting cooler heads win.
Oil traders just took Trump at his word.
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