Global oil prices retreated on Thursday as markets reacted to reports of progress in negotiations between Iran and Oman.
The diplomatic development has significantly lowered the perceived risk of supply disruptions in the Strait of Hormuz, a critical chokepoint for global energy flows.
Investors are now cautiously awaiting further signals regarding a potential broader peace agreement between the United States and Iran, which could further dampen geopolitical premiums in crude benchmarks.
Brent crude and WTI futures both softened in the session, reflecting the market's reassessment of shipping risks in the region.
The price pullback follows a period of elevated volatility driven by fears of military escalation and potential blockades in the Strait.
With the immediate threat of disruption receding, traders are unwinding hedges and reducing exposure to geopolitical risk premiums that had propped up prices in recent weeks.