Crude oil markets are closing in on their most severe quarterly decline since the early 2020 pandemic shock, as geopolitical risk premiums evaporate amid a fragile interim ceasefire in the Middle East.
The sell-off reflects a sharp pivot in investor sentiment, with traders discounting supply disruption risks that had previously propped up prices during the four-month conflict.
Brent crude and West Texas Intermediate (WTI) have both retreated significantly from their conflict-era highs.
The downward pressure is being sustained by the prospect of renewed diplomatic engagement, specifically potential US-Iran negotiations scheduled to take place in Doha.
Market participants are increasingly pricing in a scenario where the strained ceasefire holds, reducing the immediate threat to global shipping routes and export infrastructure.
This repricing comes against a backdrop of structural supply concerns that have largely been overshadowed by geopolitical volatility.