Oil prices staged a recovery on Tuesday, bouncing back from a sharp decline the previous session as market sentiment shifted toward tempered optimism regarding U.S.-Iran peace negotiations.
The rebound reflects a cautious recalibration by traders who had previously priced in heightened disruption risks amid stalled diplomatic progress.
Investors are now closely monitoring developments for concrete evidence that crude flows through the Strait of Hormuz are stabilizing, a critical threshold for sustaining any upward momentum in energy markets.
The price action underscores the market's sensitivity to geopolitical headlines in the Persian Gulf.
While the initial reaction to reports of a potential peace agreement drove global equity markets higher on Monday, the subsequent oil selloff highlighted the disconnect between diplomatic rhetoric and physical supply realities.
Brent crude futures remain volatile as participants weigh the promise of de-escalation against the ongoing uncertainty of tanker movements and route security.