International oil prices fell sharply on Monday as progress in US-Iran peace negotiations reduced geopolitical risk premiums, BBC and Al Jazeera reported. Markets anticipate that a deal would significantly lower the risk of shipping disruptions in the Strait of Hormuz.

For weeks, fears of blocked passage through the strait had kept oil prices elevated. Traders are now repricing that risk. Analysts note that oil could face further downside pressure if the agreement is formally signed. Asian equities rose on the back of lower energy costs.

Source: BBC World, Al Jazeera, CoinDesk

International crude prices jumped sharply following military exchanges between the US and Iran in the Strait of Hormuz.

The strait is the world’s most critical oil shipping chokepoint, handling approximately one-fifth of global petroleum supply. Any threat to shipping directly impacts international oil markets.

Traders reacted quickly, with Brent and WTI crude futures surging on the news. Energy sector stocks rose in tandem, while safe-haven assets like gold also gained.

Analysts noted that if escalation disrupts strait shipping, oil prices could climb to multi-month highs. OPEC members are closely monitoring the situation. Market volatility in the energy sector is expected to remain elevated in the near term.