Global crude oil prices tumbled by over 3% as market fears of an immediate full-scale military conflict between the US and Iran began to ease.
The price decline follows Washington's strategic pivot toward aggressive financial sanctions and economic pressure instead of launching fresh direct military strikes.
International benchmark Brent crude fell to around $89 a barrel, while US West Texas Intermediate (WTI) slipped to approximately $82 a barrel.
The Trump administration unveiled major new sanctions targeting third-party entities and trade networks that continue to conduct business with Tehran.
Sentiment further stabilized following reports that evacuated US diplomatic personnel are preparing to return to key Middle Eastern embassies.
Energy traders are closely tracking oil tanker movements through the Strait of Hormuz, where maritime risk premiums have begun to gradually recede.
While economic sanctions reduce the threat of direct war, analysts warn that long-term supply disruptions could keep energy markets volatile.