Brent crude fell to around $77.80 a barrel on Monday as the United States officially suspended sanctions on Iranian oil exports through August 21.
The move formalizes a temporary general license issued by the US Treasury Department, allowing the production, delivery, and sale of Iranian crude and petroleum products under the terms of a recently signed agreement with Tehran.
The announcement accelerated a sell-off in global energy markets that had already begun as traders priced in reduced supply disruption risks.
The suspension effectively removes a major bottleneck in global oil flows, increasing the available supply of Iranian crude to international buyers.
Market participants are now adjusting positions to reflect the likelihood of higher Iranian output entering the market over the next two months.
This development follows earlier reports that the US had lifted sanctions on Iranian oil, which initially triggered a sharp decline in energy stocks and commodity prices.