Brent crude futures fell sharply on Monday as investors digested signs that geopolitical tensions in the Middle East are de-escalating.
The price drop in the energy complex provided immediate relief to risk assets, with European and US equity futures pointing to higher openings as traders rotated out of safe-haven positions.
The sell-off in oil marks a reversal from the recent rally that had pushed Brent above the $95 per barrel mark earlier in the week.
The sell-off in oil marks a reversal from the recent rally that had pushed Brent above the $95 per barrel mark earlier in the week.
That surge was driven by persistent fears of shipping disruptions in the Strait of Hormuz, following warnings from Iran regarding tanker routes.
The current decline suggests that market participants are beginning to price in a lower probability of immediate supply shocks, reducing the risk premium embedded in energy prices.
This shift in sentiment comes after a period of heightened uncertainty surrounding shipping fees and diplomatic opacity in the region.