Brent and WTI crude settle at three-week lows after diplomatic progress reduces geopolitical risk premium in oil markets.
Oil prices fell sharply as diplomatic talks between Iran and Western nations raised hopes of reopening the Strait of Hormuz to shipping. Brent crude dropped $4.40, or 5%, to settle near $79 a barrel, while WTI fell nearly 6% to around $76, both hitting three-week lows.
The decline reflects a reduction in the geopolitical risk premium rather than shifts in supply or demand fundamentals. Earlier in the session, prices swung between $75 and $82 for WTI and $79 and $86 for Brent, highlighting market sensitivity to headlines. Goldman Sachs expects Brent to trade in an $80 to $90 range until a deal is confirmed or tensions escalate.
US officials reported progress in negotiations, contributing to the sell-off. The volatility underscores how closely traders are monitoring developments in the region.