Global oil prices have fallen below $80 per barrel, erasing nearly all recent war-related gains after Israeli Prime Minister Benjamin Netanyahu left the Middle East.
Oil traded near $100 per barrel on Saturday. However, prices have since dropped below $80 as Brent crude extended its losses.
The sharp decline came after Netanyahu travelled to Washington to meet US President Donald Trump.
Meanwhile, investors shifted their focus from fears of supply disruptions toward growing hopes for diplomatic engagement and de-escalation.
Last week, oil prices surged toward $100 as traders worried that further regional fighting could disrupt major energy routes and crude supplies.
However, reports of possible US-Iran talks and reduced fears of an immediate escalation triggered a rapid decline in oil prices.
The market reversal highlights how quickly geopolitical risk premiums can disappear when tensions ease.
Moreover, traders began unwinding positions linked to fears of prolonged conflict and potential disruptions to Middle Eastern oil flows.
The development could also provide relief to oil-importing countries that face higher energy costs during periods of geopolitical instability.
In Pakistan, global crude prices directly influence domestic fuel costs, making the recent decline potentially beneficial for consumers.
Nevertheless, market participants will continue monitoring diplomatic developments and regional security risks for signs of renewed disruptions.
Furthermore, any escalation involving major oil-producing countries or critical shipping routes could quickly push prices higher again.
For now, however, the oil market appears to be pricing in lower immediate risks and greater expectations for diplomatic progress.
