Oil prices retreated on Monday following reports that the United States and Iran have reached a ceasefire agreement, establishing a 60-day truce and a framework for peace talks.
The development immediately eased fears of a direct military escalation in the Persian Gulf, removing the premium that traders had attached to the threat of a Strait of Hormuz blockade.
The ceasefire agreement signals a de-escalation in a region that has been a focal point for energy supply risk.
While the immediate threat of kinetic conflict has receded, the underlying geopolitical friction remains unresolved.
The agreement establishes a temporary halt to hostilities, but significant disagreements persist regarding the core terms of any lasting settlement.
Analysts caution that the truce is fragile and does not guarantee a permanent resolution.