Global oil prices fell sharply on Monday as traders reacted to reports that the United States and Iran have reached a deal to ease tensions in the Middle East.
The selloff reflects a market shift in sentiment, with investors rapidly unwinding positions that had been hedged against potential supply disruptions in the Strait of Hormuz.
Brent crude futures dropped significantly in early trade, extending losses seen in previous sessions.
The decline follows a framework agreement announced by President Donald Trump on Friday, which markets interpreted as a credible step toward normalizing relations between Washington and Tehran.
This development directly undermines the geopolitical risk premium that has supported energy prices over recent weeks.
The price action underscores how quickly commodity markets can reprice when political narratives shift.