Brent crude dropped below the $80-a-barrel threshold for the first time since the onset of the Iran conflict, driven by surging market optimism that a U.S.-Iran peace agreement is imminent.
The dip marks a significant technical and psychological break for energy markets that have been trading on war-risk premiums for months.
The price decline follows reports that Washington and Tehran have reached a diplomatic understanding, a development that would effectively end the blockade of the Strait of Hormuz.
If realized, the agreement would allow commercial tankers to resume unhindered transit through the critical chokepoint, instantly removing the supply disruption fears that have kept energy prices elevated.
This repricing reflects a broader shift in market sentiment.
Traders are rapidly unwinding the geopolitical risk premium, betting that the threat of a prolonged energy supply shock is receding.