Gasoline prices at the pump are falling sharply, with several major retail chains cutting rates to levels seen before the outbreak of the Iran conflict.
The decline follows a steep drop in crude oil benchmarks on Monday, as traders rapidly unwind the war premium that had supported energy prices throughout the Middle East hostilities.
The repricing in oil markets comes as investors digest a preliminary peace agreement between the United States and Iran.
This diplomatic breakthrough significantly lowers the perceived risk of supply disruptions in the Strait of Hormuz, a critical chokepoint for global oil shipments.
With the threat of physical supply constraints receding, the market is shifting focus back to fundamental supply and demand dynamics rather than geopolitical risk.
Analysts note that the speed of the correction suggests the war premium was substantial and is now being stripped out efficiently.