Global oil benchmarks sold off sharply in early Asian trading on Monday, marking a decisive reversal from the recent supply-driven rally.
The sell-off was triggered by reports that the United States and Iran have reached a framework agreement to end their ongoing conflict, immediately alleviating fears of prolonged Middle East disruptions.
Brent crude and WTI futures fell more than 5% in the session, erasing much of the risk premium that had accumulated amid escalating geopolitical tensions.
Brent crude and WTI futures fell more than 5% in the session, erasing much of the risk premium that had accumulated amid escalating geopolitical tensions.
The sharp decline reflects growing investor optimism that the diplomatic breakthrough will stabilize shipping routes and restore normalcy to regional energy flows.
Markets are rapidly repricing the probability of a sustained supply shock downward as the prospect of a ceasefire gains traction.
The development follows weeks of heightened volatility driven by concerns over potential blockades and infrastructure attacks in the Strait of Hormuz.