Oil chaos cools as Donald Trump hints talks, not missiles, could be next for Iran

Oil prices retreated Friday after Donald Trump signaled a strike on Iran was not imminent, cooling fears of military escalation and easing pressure on global energy markets.

Brent crude dipped toward $77 a barrel, trimming gains from earlier in the week, while West Texas Intermediate hovered near $74.

The reversal followed a statement by White House spokeswoman Karoline Leavitt, who said the US president would decide on potential military action within two weeks, citing a “substantial chance of negotiations” with Iran.

That tempered earlier market panic, which saw Brent surge nearly 3% Thursday on speculation of an imminent U.S. attack. “Leavitt’s comments has taken some of the urgency out the market,” said Robert Rennie, head of commodity and carbon research at Westpac.

The oil market has had a wild ride this week. Futures swung in an $8 range, volatility jumped, and bullish sentiment in options markets briefly surpassed levels seen after Russia’s invasion of Ukraine.

Though Israel continues targeting Iran’s nuclear infrastructure, Iran’s oil exports remain untouched for now. Satellite imagery and tracking data suggest Tehran is rushing crude out through Kharg Island, with storage facilities nearing capacity.

Despite the turmoil, there are no signs that Iran plans to disrupt traffic through the Strait of Hormuz — a strategic chokepoint where roughly 20% of the world’s crude passes.

The energy sector remains on edge as diplomatic efforts continue behind the scenes. But with Trump holding off and no immediate threat to oil flows, traders appear to be recalibrating risk.