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International oil prices ended slightly lower.
As the United States and Iran continued nuclear negotiations, news that skepticism had emerged within the U.S. military regarding a potential strike on Iran eased military tensions and put downward pressure on oil prices.
On the 23rd (U.S. Eastern Time), West Texas Intermediate (WTI) crude for April delivery fell $0.17 (0.26%) from the previous session to settle at $66.31 per barrel on the New York Mercantile Exchange.
According to The Wall Street Journal, senior officials at the U.S. Department of Defense conveyed a skeptical stance to President Donald Trump regarding a long-term military operation against Iran.
Under the war scenarios currently under review, the U.S. military leadership believes there are risks including casualties among U.S. and allied forces, depletion of air defense capabilities, and troop overextension. These warnings were reportedly raised primarily by Chairman of the Joint Chiefs of Staff Dan Caine during meetings with the Defense Department and the National Security Council (NSC), with other senior military officials expressing similar concerns.
Caine is known to be a trusted adviser to Trump. Given that advice from Caine and other top military officials could significantly influence Trump’s decision-making, oil prices showed weakness.
Expectations that the United States and Iran will hold a third round of nuclear talks this week in Geneva, Switzerland, also lowered the risk premium in oil prices.
Tony Sycamore, an analyst at IG Markets, said, “An attack on Iran carries a high risk of regional instability and could further fuel voter dissatisfaction ahead of the November midterm elections,” adding, “For that reason, I do not believe the U.S. intends to attack Iran.”
However, Trump’s decision over the weekend to raise global tariffs to 15%, once again heightening tariff uncertainty, has also created volatility in the oil market. A court ruling deeming reciprocal tariffs unlawful and the temporary introduction of global tariffs could unsettle trade relations between the United States and major economies, disrupting macroeconomic outlooks.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.