Brent crude futures reversed earlier losses on Monday, signaling that market participants remain wary of supply risks in the Middle East despite reports of a peace agreement between the United States and Iran.
The price action suggests that traders are prioritizing the persistent threat of disruption over the immediate diplomatic headline.
The reversal comes after Asian stock markets rallied and oil prices fell sharply earlier in the session, driven by initial optimism surrounding the reported end to nearly four months of conflict.
However, the quick turnaround in energy prices indicates that the market’s risk premium for Middle Eastern supply shocks remains intact.
The US-Iran agreement, aimed at de-escalating tensions, initially triggered a broad risk-on sentiment across global equities.
Yet, the resilience of oil prices points to underlying skepticism about the durability of the truce or the potential for renewed friction.