Is the oil market signalling de-escalation?

After an initial 6% spike at the open, U.S. crude oil futures reversed sharply—falling into negative territory—as markets priced in the possibility that Iran's latest retaliation may be more symbolic than escalatory.

According to President Donald Trump, Iran gave advance notice before launching missiles at a U.S. base in Qatar, allowing defences to intercept the attack and resulting in no reported casualties.

While Tehran publicly described the strike as “devastating and powerful,” the lack of impact on the ground and the pre-warning have fuelled speculation that Iran was aiming to save face without triggering a broader conflict.

The swift reversal in oil prices reflects that sentiment. For now, the market appears to be signaling that escalation may pause here.