Brent crude futures retreated to $70.84 a barrel, down 73 cents or 1.02%, as markets digested reports that indirect talks between the United States and Iran in Doha have concluded with positive progress.
The diplomatic development marks a shift in sentiment after a weekend of missile fire from both sides that had reignited fears of a supply disruption in the Strait of Hormuz.
The price decline reflects a rapid unwinding of the geopolitical risk premium that had supported energy markets earlier in the week.
Investors are now weighing the prospect of renewed diplomatic engagement against the backdrop of ongoing tensions, with the market signaling that the immediate threat to shipping routes has receded.
The move underscores how sensitive crude valuations remain to geopolitical headlines, with risk-off flows returning as the narrative shifts from confrontation to dialogue.
This development follows a period of heightened volatility in the energy complex, where prices had spiked on concerns over cargo vessel security near Oman.