Crude oil prices have fallen sharply, dropping approximately 25% from their peak last month as markets digest growing optimism that a diplomatic resolution between the United States and Iran is imminent.
The steep correction marks a significant reversal in sentiment, stripping away the supply disruption premium that had propped up energy valuations during the prolonged conflict.
The price action reflects a swift repricing of geopolitical risk.
For 15 weeks, traders priced in the possibility of sustained supply constraints stemming from the Middle East standoff.
With reports indicating that a deal is nearing finalization, the immediate threat to global oil flows has receded, prompting a broad sell-off in energy futures.
The move underscores how quickly speculative positioning can unwind when the underlying catalyst for volatility appears to be resolving.