Energy markets sold off sharply on Thursday as a diplomatic agreement to reopen the Strait of Hormuz removed the immediate threat of a global oil supply disruption.
The resolution of the standoff has triggered a broad repricing of shipping risk, with crude benchmarks retreating from multi-day highs as traders rapidly adjusted their exposure to Middle East route volatility.
The sudden easing of tensions has allowed the market to shed the war premium that had been inflating energy prices over the past several weeks.
Brent crude and WTI futures both fell significantly in early trading, reflecting the swift return of baseline supply expectations.
The move underscores how quickly geopolitical risk premiums can evaporate when diplomatic channels deliver a concrete resolution.
The agreement marks a decisive turning point in the recent escalation that had kept tanker insurance rates elevated and forced many carriers to reroute around the Cape of Good Hope.