Crude oil prices declined on Monday as diplomatic progress between the United States and Iran reduced fears of supply disruption.
Mediators indicated that a "roadmap" toward a final peace agreement is taking shape, signaling a potential de-escalation of tensions that have long weighed on energy markets.
The shift in geopolitical sentiment provided immediate relief to oil traders, who have priced in significant risk premiums due to the threat of sanctions or conflict in the Strait of Hormuz.
With the prospect of a negotiated settlement gaining traction, the immediate pressure on supply chains appears to be easing, allowing prices to correct from recent highs.
This development follows earlier reports that the United States was preparing to partially lift targeted sanctions on Iran’s oil exports.
Those initial disclosures had already triggered a retreat in crude prices, as markets anticipated a gradual normalization of trade flows.