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In early August, energy traders were bracing for an Iranian attack on Israel that could trigger a broader Middle East war and an oil price spike. Six weeks later, markets are blithely unconcerned and oil prices are near two-year lows.

Peace is hardly breaking out in the Middle East, and the volatile region could produce an unhappy surprise at any moment. But for now, concerted action by the Biden administration is helping keep hostilities contained as voters decide whether Biden’s vice president, Kamala Harris, deserves her own shot at the White House. That's contributing to falling oil and gasoline prices, which is a welcome tailwind to Harris in the final weeks of the election.

The Middle East has been on hair-trigger alert since the Hamas terrorist group attacked Israel last Oct. 7, killing nearly 1,200 Israeli citizens. Israel’s ongoing invasion of Gaza has put the tiny Jewish state in direct conflict with Iran, which backs Hamas, along with the Hezbollah militants in Lebanon and several other regional groups hostile to Israel.

After Israel killed an Iranian general in Syria in April, Iran blitzed Israel with several hundred drones and missiles, almost all of them shot down by a combination of Israeli, American, and other allied forces. The attack didn’t accomplish much, yet Iran signaled that its retaliation for the killing of its general was complete.

Then, on July 31, an explosion killed Hamas’s top political leader while he was visiting Tehran. Iran blamed Israel and vowed to retaliate once more. Many analysts expected a larger or at least more effective attack on Israel than the one in April, which made Iran look somewhat feckless. That tension pushed oil prices up from $72 per barrel to about $80 in early August.

That second retaliatory attack is now long overdue. In April, Iran waited 12 days before launching the attack to avenge the dead general in Syria. It’s now been 40 days since the July 31 attack in Tehran, and oil traders seem to have written off an Iranian response. West Texas crude has fallen to around $68, the lowest level since December. Wall Street is cutting oil price targets, with Citi saying Brent crude, the global benchmark, could drop to $60 by next year.

With little public notice, President Biden has sent the message that another attack on Israel could trigger American action against Iran. The Pentagon has sent two carrier battle groups to the Middle East region, an imposing show of force that Iran surely noticed.

“The United States has deployed considerable military assets in the region and has made it very clear to Iran that there would be repercussions from another direct attack like April,” Gregory Brew of the Eurasia Group said during a Sept. 4 webcast. “They’re conscious of their conventional military inferiority against Israel and certainty against the United States.”

A mission delayed is not necessarily a million canceled. Iranian commanders are still threatening “the bitterness of Tehran’s revenge.” On Sept. 7, a top British official said Iran was still likely planning to attack Israel. Pentagon and White House spokespeople say the same thing. One possibility is that Iran is waiting to see if talks about a ceasefire between Israel and Hamas produce results.

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As the April 14 exchange showed, Iran and Israel can exchange heavy fire without damaging oil flows or energy infrastructure. But an escalation scenario might affect energy markets, by definition. Iran attacked Saudi oil facilities in 2019, and while the two longtime antagonists are now in a kind of truce, that could end in a broader war. Israel could also strike Iran’s nuclear facilities at some point, which might leave Iran feeling it has no choice but to enlist Hezbollah and other proxies in an all-out fight with Israel, even if it does draw in the United States.

Middle East oil has continued to flow amid many cataclysms. So maybe traders are right to be sanguine. Biden, and by extension Harris, were politically stung by US gasoline prices that hit $5 per gallon in 2022. So they have the strongest possible motive to keep a lid on hostilities, to the extent they can.

American drivers, meanwhile, are enjoying a respite. Gasoline prices are down about $0.20 per gallon during the last month, to about $3.27. That’s about 14% cheaper than a year ago, and lower prices seem to be coming. By the end of September, gas prices could be under $3 in half the country, Andy Lipow, president of Lipow Oil Associates, recently told Yahoo Finance.

Markets are sending a different message about energy prices than Middle East provocateurs are. Let’s hope the markets are right.

Rick Newman is a senior columnist for Yahoo Finance. Follow him on X at @rickjnewman.