Oil prices fell over 4% on Monday. The decline pushed crude to a two-week low.
Diplomatic signals suggest the United States and Iran are nearing a potential peace agreement. This optimism reduced the risk premium that has supported prices for months.
Iran’s foreign ministry spokesperson, Esmaeil Baghaei, stated on Monday that negotiations focus on ending the war. Analysts expect a full return to normal oil flows through the Strait of Hormuz to take months.
The prospect of a resolution shifted market sentiment regarding near-term supply risks.