Oil prices fell on Wednesday after President Donald Trump signaled a possible easing of tensions in Iran, prompting traders to dial back the geopolitical risk premium that had recently supported crude prices.
West Texas Intermediate (WTI) crude erased earlier gains following remarks by Trump during a signing ceremony, where he suggested that executions in Iran had been halted.
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Natural Gas • 3.092 -0.327 -9.56%
“We’ve been informed very strongly that the killings in Iran are stopping,” Trump said. “There are no plans for executions.”
The comments marked a notable shift in tone from the U.S. president, who only a day earlier had canceled meetings with Iranian officials and encouraged continued protests inside the country. In that earlier statement, Trump warned that those responsible for violence against demonstrators would “pay a very heavy price.”
Markets Reassess Geopolitical Risk
While Trump stopped short of ruling out U.S. military action, saying he would “watch and see what the process is,” investors interpreted his remarks as a signal that immediate escalation may be less likely.
Trump also said the administration had received a “very good statement” from people familiar with developments on the ground, further easing market concerns.
Oil markets have been particularly sensitive to events in Iran, where widespread anti-government protests—initially triggered by economic hardship—have evolved into broader demonstrations against the country’s leadership. Human rights groups have reported that thousands of protesters have been killed during the unrest.
Over the weekend, Trump’s warning that the United States might consider military intervention to support protesters had fueled fears of supply disruptions from Iran, a key member of OPEC. Those concerns helped push crude prices higher as traders priced in the risk of instability affecting global oil flows.
Wednesday’s softer rhetoric, however, prompted a pullback as investors reassessed the likelihood of near-term supply shocks.
Prices Pull Back
WTI crude was trading near $60 a barrel, down about 1.3% on the day, reflecting a reduction in geopolitical risk expectations rather than a shift in underlying supply-demand fundamentals.
Despite the decline, analysts cautioned that volatility is likely to remain elevated as markets continue to monitor developments in Iran and the broader Middle East.
“The situation remains fluid,” one energy strategist said. “Any renewed escalation—political or military—could quickly push risk premiums back into the market.”
For now, traders appear to be taking Trump’s comments as a signal of temporary restraint, even as the broader crisis remains unresolved.
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