Trump Backs Off Hard-line Threats Amid Market Pressure, Wins Time Window But Doubts Linger

Just before the U.S. markets opened on Monday, Trump retracted his previous threat to destroy Iran’s electrical infrastructure if the Strait of Hormuz was not reopened within 48 hours. This shift was driven by multiple factors, including soaring energy prices triggered by the U.S.-Israel conflict with Iran, global market turbulence, and hopes that a new round of negotiations could lead to an agreement to end the conflict.

According to sources familiar with the matter, Trump’s move was partly aimed at calming the markets. His statement immediately triggered a chain reaction: Brent crude oil prices plummeted, while the S&P 500 and U.S. Treasuries rebounded.

Meanwhile, sources said U.S. allies privately warned Trump that the war was rapidly turning into a disaster; Gulf countries also urged him not to destroy Iran’s critical infrastructure, as these facilities are vital to preventing Iran from becoming a failed state after the conflict ends.

On March 23, Trump spoke to the media before boarding at Palm Beach International Airport.

Former U.S. Department of Defense Middle East Deputy Assistant Secretary Dana Stroul said, “Trump needs to find a way to step back from a threat that will almost certainly trigger a new escalation, one that crosses a new threshold by attacking civilian energy infrastructure, which could constitute a war crime.” She also noted, “The announcement of a five-day pause and the start of negotiations happened just before the U.S. market opened on Monday, which is no coincidence.”

On Monday, Trump told reporters that Iran had proactively contacted the U.S. to initiate negotiations because they are eager to reach an agreement. He also claimed that during a call on Sunday with an unnamed Iranian official, his son-in-law Jared Kushner, and adviser Steve Wittekov, Tehran agreed to hand over its domestic nuclear materials and promised not to resume nuclear activities. He said negotiations are expected to continue by phone on Monday. Iran denied such talks took place.

Trump stated, “We’ll see what happens. If progress is made, the issue will be resolved; otherwise, we will continue to strike without mercy.”

Sources familiar with the diplomatic negotiations said Trump’s decision to delay the planned strikes on energy facilities was largely seen as an attempt to control oil prices; Trump also acknowledged this connection on Monday.

Trump said, “Once an agreement is reached, oil prices will drop like a rock. I think they are already falling today. So the chances of us reaching an agreement are very high.”

Iran immediately denied any such negotiations and claimed victory. The semi-official Fars News Agency quoted an anonymous Iranian source saying, “He retreated only after hearing that our goal would cover all power plants across the Middle East.” After the Fars report was published, crude oil prices narrowed about half of their initial decline, and some traders expressed skepticism about the accuracy of Trump’s claims.