Brent crude futures for October delivery fell more than 7% in the session, sliding to $83.40 a barrel.
The steep decline reflects a rapid repricing of supply risk as markets digest growing optimism that the United States and Iran are nearing a diplomatic agreement.
The move marks a significant reversal from recent weeks, when geopolitical tensions had driven Brent toward the $90 level.
The move marks a significant reversal from recent weeks, when geopolitical tensions had driven Brent toward the $90 level.
The current sell-off suggests traders are quickly unwinding positions hedged against potential Strait of Hormuz disruptions, betting that a deal would normalize shipping routes and stabilize global supply flows.
This development follows a period of heightened volatility in energy markets, where prices had previously retreated to pre-war lows before spiking again on renewed fears of escalation.
The current drop extends the downward pressure seen on London’s Intercontinental Exchange, signaling that the market is now prioritizing diplomatic resolution over conflict scenarios.