Brent crude futures fell 77 cents, or 1.1%, to settle at $70.80 a barrel, extending a three-day losing streak.
The decline follows the conclusion of diplomatic talks between the United States and Iran in Doha, which have helped alleviate immediate concerns about supply disruptions in the Strait of Hormuz.
The sell-off reflects a sustained shift in market sentiment as investors weigh the prospect of renewed diplomatic engagement against the backdrop of recent military tensions.
After a weekend of missile fire from both sides that had previously spiked risk premiums, the dialogue in Doha has provided a counter-narrative, prompting traders to reduce exposure to geopolitical supply shocks.
This development marks a significant pivot from the volatility seen earlier in the week.
The market is now pricing in a lower probability of immediate escalation, allowing the risk premium embedded in energy prices to compress.