President Donald Trump told reporters on Monday that “Iran militarily is effectively over,” his clearest signal yet that he does not plan to restart the bombing campaign against Iran. Oil markets moved fast on the claim. In trading on Tuesday, Brent crude fell below $90 a barrel for the first time since August 31, and US crude settled at $86.04, as traders cut the price of war risk.
“We’re just keeping it the status quo”
The president made a surprise appearance in the White House briefing room soon after a closed door meeting with Qatar’s prime minister, Sheikh Mohammed bin Abdulrahman bin Jassim Al Thani, a key mediator in the war. Vice President JD Vance also took part in the meeting, according to Al Jazeera.
“Iran militarily is effectively over,” Trump said. “We’re just keeping it the status quo.” He said Iran has been “decapitated,” and that Gulf countries, including Qatar, Saudi Arabia, the United Arab Emirates, Bahrain and Kuwait, would prefer that the current position hold. He added that he believed the conflict would end “fairly soon.”
The tone was softer than the one he used before last week’s midterm elections, when he repeatedly threatened to resume strikes if Tehran did not accept US terms. The Associated Press noted that Trump has made similar predictions of a near deal before, only for the fighting to continue. This time he paired the softer tone with a warning: “The military action doesn’t seem to be a very necessary thing, but we’re locked and loaded, ready to go for any reason that changes.”
Oil falls below $90
The clearest reaction came from the oil market, which has swung with every turn of the war since it began in February. Brent futures dropped more than $3 a barrel in early trading on Tuesday and slipped below $90 for the first time since August 31, according to Reuters. Brent later settled down $1.08, or 1.2 percent, at $91.49 a barrel. US West Texas Intermediate crude fell 81 cents, or 0.9 percent, to settle at $86.04. Both benchmarks closed at their lowest levels since August 31 for a second straight day, after Brent had already settled 5.85 percent lower on Monday.
“The market continues to prioritize President Trump’s more conciliatory tone toward Iran since the midterms,” said Tim Waterer, chief market analyst at KCM Trade, in comments reported by Reuters. Reuters also reported that growing expectations of a global oil surplus added to the pressure on prices.
Tehran says there are no talks
Iran’s public response was blunt. Mohsen Rezaei, a top Iranian security official, said in an interview with the pro-Iran broadcaster Al-Mayadeen that there are currently no negotiations taking place between Tehran and Washington, Reuters reported. Oil prices recovered part of their early losses after his comments. Al Jazeera reported that Iranian officials dismissed Trump’s latest remarks as fake news.
That puts Tehran’s position directly against the president’s. Trump told reporters on Monday that the Iranians were “talking to us, and they’re talking very politely.” On Tuesday, Secretary of State Marco Rubio told Group of Seven allies in Paris that US sanctions and the naval blockade are working, so the president does not need to order major combat operations, according to Reuters. Qatari officials presented proposals on Iran’s nuclear program last week, two Middle East government officials told the Associated Press.
What “effectively over” does not mean
No peace deal has been announced, and the machinery of the war is still in place. Trump gave no sign of a drawdown of the thousands of US troops and warships stationed off Iran, the Associated Press reported, and the naval blockade on Iranian ports continues. “We’re keeping it going. We have the greatest military blockade ever,” he said. A new US task force, Iron Gate, announced on November 7, is meant to squeeze Iran’s overland trade as well.
The shooting has not fully stopped either. US forces carried out limited strikes on Iran, including against its air defenses, at least twice in the past week, according to the Associated Press. And the declaration came just days after a sharp weekend escalation, when US forces disabled the ship M/V Huda in the Gulf of Oman, Iran said it had lifted its self-imposed missile range limit, and missiles were intercepted over Riyadh, as Vellum Daily reported in its coverage of the Iran tensions and the first drop in oil.
Tehran, for its part, continues to demand concessions before any nuclear talks: an end to the blockade, sanctions lifted, frozen assets released and compensation for war damage, according to the Associated Press. None of those demands has been met. For now, the war sits where Trump left it on Monday: the bombing on hold, the blockade in force, and no agreement signed. Follow the next moves in our News coverage.
Sources: Associated Press; Reuters; Al Jazeera reporting on the White House remarks, the Iranian response and Tuesday’s oil settlement prices.