Still, the Pentagon said it’s too early to tell what Iran will do next, and Sky Arabia reported a new rocket attack targeting the Green Zone in Baghdad on Thursday, reflecting heightened political tensions across the oil-rich region.

Oil surged last week when the U.S. assassinated Iranian military commander Qassem Soleimani in an airstrike in Baghdad, then climbed to almost $72 a barrel on Wednesday after Iran retaliated. Yet the gains quickly fizzled as the prospect of war receded. With U.S. shale-oil production plentiful and spare capacity across OPEC nations high, it would take a disruption to physical supplies to keep prices elevated, according to Goldman Sachs Group Inc.

“As geopolitical tensions appear to enter a new equilibrium, rather than escalate further, the overall supply conditions in the market tend to favor oil reverting lower,” said Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA. “The oil market could turn its attention back to assessing fundamentals again and find that they are not particularly price-supportive.”

Brent futures for March settlement slipped 5 cents to $65.39 a barrel on the ICE Futures Europe exchange as of 1:45 p.m. in London, after rising as much as 1% earlier. The contract slumped 4.2% to settle at $65.44 on Wednesday, the lowest since Dec. 16, after earlier rising as much as 5.1%.

West Texas Intermediate for February delivery was up 5 cents at $59.66 a barrel on the New York Mercantile Exchange after climbing as much as 1.2% earlier. Futures initially rose above $65 a barrel on Wednesday, yet declined 4.9% to close at $59.61, the lowest since Dec. 12.

U.S. Vice President Mike Pence said intelligence suggests Tehran is urging militias to refrain from reprisals, though America remains “ready for everything.” Iranian President Hassan Rouhani tweeted that the government’s final answer to the assassination will be to “kick all U.S. forces out of the region.”

“We saw furtive, albeit modest, injections of a fear premium but an equally quick deflation as soon as it appeared that oil supply from the region had not been affected,” said Vandana Hari, founder of Vanda Insights in Singapore. “However, it may be a mistake to regard this as an enduring cool-down.”