Crude oil prices staged a sharp recovery on Monday, with WTI futures climbing 2.4% to $70.85 per barrel and Brent rising 1.7% to $73.20.
The rebound marks a decisive shift in sentiment after benchmarks shed nearly 10% of their value over the previous week amid escalating geopolitical tensions.
The rally was triggered by reports of a new agreement between the United States and Iran to halt recent hostilities in the Middle East.
According to CNBC, the deal aims to de-escalate military confrontations that had reignited fears of disruptions to critical energy supply routes.
The immediate market reaction suggests traders are rapidly repricing the risk premium that had built into energy contracts during the period of heightened conflict.
This development follows a volatile stretch for energy markets, where renewed military strikes between the two nations had previously driven prices higher on supply disruption concerns.