Global crude oil prices declined on Monday as diplomatic developments between the United States and Iran reduced market anxiety over potential supply disruptions.
The sell-off in energy markets followed reports that negotiators have made tangible progress in peace talks, with mediators indicating that a framework for a final agreement is taking shape.
Brent crude and WTI benchmarks both retreated in the session as traders adjusted positions to reflect the lower probability of a prolonged conflict.
The price action underscores how quickly energy markets can reprice when geopolitical risk premiums are unwound.
Investors who had hedged against supply shocks from the Strait of Hormuz region began to reduce exposure, driving down forward curves.
The shift in sentiment comes after weeks of elevated volatility driven by fears that escalating tensions could disrupt global oil flows.