Global oil prices retreated sharply on Monday as traders priced in a potential de-escalation of geopolitical risks following reports of progress in peace negotiations between the United States and Iran.
The development marks a significant shift in diplomatic posture, with markets rapidly unwinding the supply disruption premium that had supported benchmarks in recent sessions.
Brent crude and WTI futures declined in Monday trading as the prospect of a stabilized Strait of Hormuz reduced immediate concerns over export bottlenecks.
The sell-off reflects a swift repricing of the geopolitical risk premium, with investors adjusting positions ahead of any formal treaty ratification.
Energy equities also faced pressure as the outlook for sustained supply constraints dimmed.
The preliminary agreement aims to end the ongoing conflict, signaling a move away from the heightened tensions that had driven volatility in energy markets.