Global oil prices retreated on Monday following reports that US and Iranian officials have made progress in peace negotiations.
The development has sparked relief across energy markets, with traders pricing in a potential de-escalation of geopolitical risks that have weighed on the sector.
Brent crude, the global benchmark, fell 1.7% in early trading to $79 a barrel.
West Texas Intermediate (WTI) also declined, tracking the broader sell-off in energy assets.
The move marks a sharp reversal from recent sessions where supply concerns and regional tensions had kept a premium on crude prices.
The price action comes as multiple sources indicate that the two nations are nearing an interim agreement aimed at ending the ongoing conflict.