Brent crude futures for August delivery fell 1.05% to settle at $77.08 a barrel on Tuesday, continuing a downward trajectory that began earlier in the week.
The decline reflects growing market confidence that diplomatic engagement between the United States and Iran could lead to a tangible increase in global oil supply.
09% to $78.89 after the conclusion of the first round of US-Iran talks in Switzerland.
The sell-off follows a sharp drop on Monday, when Brent fell 2.09% to $78.89 after the conclusion of the first round of US-Iran talks in Switzerland.
Traders are interpreting the diplomatic progress as a signal that Tehran may secure waivers or agreements that allow for a resumption of exports, thereby alleviating supply constraints that have supported higher prices.
The market is now focused on the potential for a sustained easing of geopolitical risk premiums.
While the immediate impact has been a repricing of near-term supply expectations, the long-term trajectory depends on the substance of any agreements reached in subsequent rounds of negotiations.