Oil prices dropped significantly on Monday as traders reacted to reports that the United States and Iran have reached a deal to ease tensions in the Middle East.
The selloff reflects a market shift in sentiment, with investors now pricing a lower probability of renewed military conflict in the region.
The price decline underscores how quickly geopolitical risk premiums can evaporate when diplomatic breakthroughs are anticipated.
However, the rally in calm is fragile.
Multiple analysts caution that the reported agreement contains unresolved snags and potential snags that could derail the process, leaving the market vulnerable to a sharp reversal if the deal collapses.
The reported progress follows a chaotic week of conflicting signals.