Oil prices fell for a second consecutive session as the ceasefire between the United States and Iran held firm, reinforcing investor confidence that the immediate threat to Gulf energy infrastructure has receded.
The pause in hostilities, now in its second day, has allowed markets to digest the terms of the 60-day truce and the accompanying framework for peace talks, shifting sentiment away from the risk premium that had built up during the weekend's missile exchanges.
Brent crude and WTI benchmarks retreated as traders scaled back hedges against potential supply outages.
The decline reflects a broader repricing of geopolitical risk, with the market moving from a stance of acute disruption fear to one of cautious optimism regarding the stability of regional shipping lanes.
While the truce is temporary, the immediate removal of the conflict premium has weighed on prices, particularly as attention turns to the diplomatic process in Doha.
The development follows a volatile period that saw oil prices spike on fears of a prolonged military engagement.