Brent crude futures for October delivery dropped 5.16% to $83.39 a barrel, while US WTI crude for September delivery declined nearly 6% to $79.66.
The sharp sell-off in energy markets reflects a collision between growing geopolitical optimism and a decisive supply-side expansion by OPEC+.
The price pressure intensified after US President Donald Trump called off a planned military strike on Iran, signaling a potential de-escalation in the region.
Market participants had been pricing in a risk premium for shipping disruptions and route exposure in the Middle East; the cancellation of the strike removed a key driver of that premium.
Simultaneously, OPEC+ announced a boost to production quotas for September, adding tangible supply concerns to the market.
This dual dynamic highlights the shifting balance in oil markets.