Crude oil prices fell more than 5% in early Asian trading on Sunday, driven by renewed optimism that a formal ceasefire agreement between the United States and Iran is imminent.
The sharp sell-off reflects a rapid repricing of geopolitical risk premiums as traders digest reports that President Donald Trump is preparing to announce a framework deal with Tehran.
Brent crude and West Texas Intermediate (WTI) both posted significant losses, with Brent dropping below key support levels as the market absorbed the prospect of stabilized shipping routes through the Strait of Hormuz.
The move marks a continuation of the broader decline that began earlier in the week, when initial reports of diplomatic progress triggered a broad-based sell-off in energy markets.
The price action underscores how quickly sentiment can shift in the energy complex when geopolitical tensions ease.
After weeks of volatility driven by fears of supply disruptions and military escalation, the market is now pricing in a return to normalcy in Middle Eastern shipping lanes.