Brent crude futures fell sharply in Monday trading after the US Treasury Department announced a temporary general license allowing Iran to produce, deliver, and sell crude oil for the next 60 days.
The authorization, which also covers petrochemicals and petroleum products, effectively lifts the immediate threat of a supply disruption from one of the world's major oil producers.
The move is part of a broader memorandum of understanding aimed at de-escalating regional tensions and ending the ongoing conflict.
By granting this specific waiver, Washington has signaled a pragmatic approach to energy security, prioritizing stable global supply chains over maximum pressure tactics in the short term.
The license permits US entities to engage in transactions related to Iranian oil, a significant shift from previous sanctions regimes.
Market participants quickly repriced the risk premium embedded in crude prices.