Oil prices moved lower early Monday as investors reacted to a second straight night without new US strikes on Iran. The calmer tone helped reduce immediate fears that the recent conflict could interrupt crude flows from the Middle East.
At the same time, US equity futures pointed higher, suggesting broader market relief after weeks of rising geopolitical tension. Traders appeared to scale back some of the risk premium that had built into energy markets as the situation escalated.
The main focus remains the potential impact of any military action on oil supply routes and regional production. When concerns about disruption ease, crude often gives back gains as markets reassess the likelihood of a supply shock.
Even with Monday's move, sentiment is still tied closely to developments between the US and Iran. Investors are likely to keep watching for any shift in military activity, as further escalation could quickly send oil and other risk-sensitive assets in the opposite direction.
