Oil prices dropped significantly in early Sunday trading after President Donald Trump announced that US forces would hold off on new strikes against Iran.
The directive followed claims that a comprehensive agreement to end the fighting in the Middle East is imminent, offering a sudden de-escalation in a conflict that has weighed heavily on energy markets for weeks.
Brent crude and WTI futures both retreated from recent highs as traders priced in the reduced risk of immediate supply disruption.
The market reaction underscores how sensitive energy benchmarks remain to geopolitical headlines, with the threat of military action previously driving a risk premium into oil prices.
The pause in strikes removes the most acute near-term catalyst for a supply shock, allowing sentiment to stabilize.
This development follows a period of intense volatility driven by tensions in the Strait of Hormuz.