Crude oil benchmarks fell sharply on Monday after the United States announced a temporary waiver of sanctions on Iran, effectively permitting the country to resume oil exports.
The US Treasury Department issued a temporary general license that allows for the production and shipment of Iranian crude, a move that immediately altered the supply outlook for global energy markets.
The repricing was swift, with Brent and WTI crude sliding as traders digested the prospect of increased supply from Tehran.
The policy shift removes a key constraint on Iranian output, which had been a persistent source of supply tightness and geopolitical premium in oil prices.
Market participants are now recalibrating supply models to account for the potential return of Iranian barrels to the global market.
The sell-off in energy assets coincided with broader risk-off sentiment in equities.