Brent crude futures have fallen sharply, breaking back below the US$100 per barrel threshold for the first time in weeks.
The sell-off was triggered by reports that Pakistan is actively seeking to revive diplomatic channels between the United States and Iran, signaling a potential de-escalation in tensions that have long weighed on global supply expectations.
The market reaction was swift and severe, with the London benchmark shedding nearly 5% in the session.
The market reaction was swift and severe, with the London benchmark shedding nearly 5% in the session.
This move reverses a period of sustained gains driven by fears of military confrontation and supply disruptions in the Strait of Hormuz.
Traders are rapidly unwinding positions that priced in a prolonged period of geopolitical instability, as the prospect of renewed dialogue reduces the immediate risk of a supply shock.
The development follows earlier indications that former U.S. President Donald Trump has signaled hesitancy to resume full-scale military action against Iran.