Oil prices fell on Tuesday as investors shifted focus to the prospect of renewed diplomatic engagement between the United States and Iran in Doha.
The decline comes after a weekend of missile fire from both sides that tested the fragile interim ceasefire intended to end the four-month-old conflict.
Markets are increasingly pricing in a potential resolution, reducing the premium for geopolitical supply disruption.
Brent crude futures retreated in early trade, reflecting a broader risk-off sentiment among energy traders.
The sell-off underscores how quickly sentiment can pivot when diplomatic channels reopen, even amid ongoing military posturing.
Traders are weighing the likelihood of a formal agreement against the persistent risk of further escalation in the Strait of Hormuz.