President Donald Trump thinks it is possible to do a deal with Iran. He said this after three days had elapsed since there was no further military action between the two countries. It is his best indication yet that dialogue, rather than a show of force, could lead the way as to what will follow in this showdown.

But, Iran is not ready to label it a negotiation. Authorities in Tehranism talk only about communication via go-betweens. They don’t go so far as to say actual negotiations have begun. This tonal differential indicates that the moment is far from stabilised.

Calm Returns, But Danger Has Not Left

Three days of no strike activity are signs of real progress. Even if negotiations are unsuccessful, Trump says that military action remains an option. Iran has also relaxed its reaction toward the U.S. targets in the Gulf. Oman has been giving quiet efforts to facilitate the reopening of the Strait of Hormuz, the narrow passage through which a large proportion of the world’s oil flows.

This is not a settled area. Houthi fighters in Yemen, backed by Iran, launched fresh drone strikes on Saudi oil sites. Saudi forces say they shot down several drones before they could hit key facilities. These attacks prove the danger has not gone away, even as diplomacy gains ground.

Oil Prices Fall as Fear Eases

Fluctuations in the energy market were quick to respond. The price of Brent is around $85 per barrel. WTI trades around $82. Both prices continue to decline, triggered by Monday’s sharp decline. Just last week, Brent shot past $100 a barrel following attacks on ships in the Red Sea. It is no longer the fear of a major supply shock to be a concern of traders.

What Comes Next

Investors will watch closely in the coming days. Several important events are forthcoming. Israeli Prime Minister Benjamin Netanyahu will meet Trump in Washington. Nuclear talks with Iran are expected to be their top priority. Fresh signs of progress or emerging tensions could quicken oil markets again.