Global oil prices fell sharply on Wednesday after reports suggested that a U.S. military strike on Iran is not imminent, easing the geopolitical risk premium that had pushed crude higher earlier in the week.
Brent crude slipped to $63.45 per barrel, down $3.07 or 4.62%, while U.S. West Texas Intermediate (WTI) fell to $59.03 per barrel, losing $2.99 or 4.82%. WTI retreated toward the $60 mark after trading above that level earlier in the session.
The sell-off followed new details indicating that Washington remains cautious about launching military action against Tehran.
White House Signals No Rush to Military Action
According to U.S. officials familiar with internal discussions, President Donald Trump has told his national security team that any potential action against Iran must be swift, decisive, and limited, avoiding a prolonged conflict.
Advisers, however, have not been able to assure the president that a strike would quickly destabilise the Iranian government. Officials have also raised concerns about whether the U.S. currently has sufficient military assets in the region to contain a strong Iranian response.
The absence of key resources, including aircraft carriers that remain days away from the Gulf, has further reduced the likelihood of an immediate large-scale operation.
As a result, policymakers are weighing more limited options—if they act at all—while keeping escalation on the table.
Markets Reprice Risk
Traders had spent much of the week anticipating possible “kinetic action” against Iran. But a report by NBC, citing multiple sources close to the administration, said that no final decision has been made and that any move could still take days.
That shift in expectations triggered a rapid unwind in energy markets. Crude prices, which had risen on fears of supply disruptions, fell by about 4% as traders reassessed the probability of conflict.
Precious metals also sold off sharply as investors reduced positions built on geopolitical risk.
Leadership Uncertainty Adds to Caution
Beyond military concerns, U.S. officials are also grappling with questions about political stability in Iran should the current government weaken.
In remarks to Reuters, President Trump said opposition figure Reza Pahlavi appeared “very nice” but expressed doubt about his ability to command broad domestic support or lead the country if the existing regime were to fall.
“I don’t know whether or not his country would accept his leadership,” Trump said, adding that the situation had not yet reached the point where succession planning was relevant.
The comments underscored the lack of a clear post-crisis roadmap, reinforcing the administration’s reluctance to pursue a rapid intervention.
Oil Rally Loses Momentum
Trump has previously warned that Iran’s government could collapse under pressure from protests, but he has also acknowledged that outcomes remain uncertain. That ambiguity, combined with logistical constraints and strategic caution in Washington, has reduced expectations of near-term military action.
With the immediate threat of conflict receding, oil markets stripped out much of the geopolitical premium that had driven prices higher, sending crude sharply lower by the end of the session.