Brent crude prices fell sharply on Monday as a reported pause in U.S. military strikes against Iran removed a key supply disruption premium from the market.
The de-escalation in the Middle East triggered a broad risk-on rally, with the U.S. dollar retreating against major peers as investors rotated away from safe-haven assets.
The drop in oil prices reflects the market’s rapid repricing of geopolitical risk.
With the immediate threat to shipping routes and production infrastructure easing, traders unwound positions that had been hedged against potential supply shocks.
The move underscores how sensitive energy markets remain to diplomatic and military developments in the region, even as underlying fundamentals stabilize.
The dollar’s weakness against currencies such as the yen further illustrates the shift in sentiment.