Trump suddenly "softens" Iran stance, the geopolitical calculations behind the 4% short-term plunge in oil prices

Trump suddenly shifts stance on Iran issue. The U.S. President announced on Wednesday at the White House that he has received assurances that Iran will cease “killing” protesters, a statement that hints he may delay military action against Iran. The market responded swiftly, with international oil prices dropping by up to 4% in the short term. Behind this dramatic turn, it reflects Trump’s balancing of geopolitical and economic interests, as well as the complexity of the current international situation.

Trump’s Attitude Shift

From Hardline to Moderate

Trump previously called on the Iranian people to continue opposing the Khamenei government and stated he would “take appropriate action” after learning of protesters’ deaths. These remarks suggested he might consider military intervention. But just a few days later, he reversed course, claiming he had received guarantees that Iran would stop “killing” and stating there are “no plans or executions” underway.

This 180-degree change warrants deep reflection. Trump emphasized that if Iran’s promises prove false, he will be “very disappointed.” This wording both leaves room for pressure and preserves his own flexibility.

Possible Considerations

According to relevant sources, the internal situation in Iran indeed carries uncertainties. An insider, after a year and a half of silence, recently bet that Khamenei would not become the Supreme Leader before January 31, indicating doubts about the stability of the Iranian regime itself.

Trump’s “softening” may be driven by several reasons: first, to prevent a spike in oil prices from impacting the U.S. economy; second, to declare victory after receiving some form of commitment from Iran to satisfy domestic political needs; third, to leave room for future negotiations.

Market Reaction and Reassessment of Geopolitical Risks

Implications of Oil Price Drop

A 4% decline in international oil prices may seem modest, but in a geopolitically sensitive period, it reflects a rapid reassessment of risks by the market. The drop suggests market participants believe the risk of escalation in Middle East conflicts has eased in the short term.

However, this easing may be temporary. According to the latest reports, BiyaPay analysts point out that the current geopolitical situation contains multiple “powder kegs”—such as Greenland sovereignty disputes and ongoing protests in Iran—that could again boost demand for safe-haven assets.

Reallocation to Safe-Haven Assets

As oil prices fall, safe-haven funds may flow into gold and other precious metals. Analysts believe that if relations between Europe and the U.S. or conflicts in the Middle East further deteriorate, spot gold, silver, and other precious metals are likely to continue benefiting. This indicates that while the market has temporarily eased on Trump’s statements, concerns over long-term geopolitical risks remain.

Key Points to Watch Moving Forward

Whether Trump’s assurances can be fulfilled depends on multiple variables. Whether the Iranian regime can truly control protests, and whether Trump will change his stance again due to any new escalation, are issues the market must closely monitor.

Additionally, reports indicate internal disagreements within the Trump administration on various policies (such as Federal Reserve policies, cryptocurrency regulation, etc.), which could impact the stability of its long-term stance on Iran.

Summary

Trump’s sudden “softening” is a typical geopolitical leverage move, reflecting both his “threat-based negotiation” style and the importance of energy prices to the U.S. economy. The 4% short-term decline in oil prices suggests the market believes the risk of short-term escalation has decreased, but multiple uncertainties in the geopolitical landscape still exist. Investors should closely follow developments in Iran, the consistency of the Trump administration’s policies, and movements in oil prices and safe-haven assets. The story is far from over.