WTI crude futures dropped about 5% toward $91 per barrel on Monday, while Brent crude fell roughly 5% toward $98, extending last week’s sharp decline. The selloff follows growing expectations that the United States and Iran could reach a deal to end the conflict. So, what changed so quickly? Markets now see a clearer path toward easing supply disruptions. Oil Extends Losses As Deal Expectations Rise Crude prices have reversed aggressively after weeks of gains driven by geopolitical tension. The latest move lower reflects a shift in sentiment, as traders begin to price in a potential resolution. Reports suggest that a proposed agreement could bring an end to hostilities and restart energy flows through the region. The reaction shows how quickly the oil market recalibrates. When supply risks dominate, prices surge. When those risks ease, even slightly, prices fall just as fast. This latest drop highlights that dynamic in real time. Strait Of Hormuz Back In Focus At the center of the market’s attention sits the Strait of Hormuz. This narrow waterway carries roughly one-fifth of global oil and liquefied natural gas shipments. Any disruption there sends shockwaves across global energy markets. Now, traders see a possibility that the strait could reopen fully. If that happens, supply could return at scale. Would that push prices even lower? Yes, because restored flows would ease one of the biggest constraints on global energy supply. Still, the situation remains fluid. President Donald Trump said the United States will maintain its blockade of the strait until a formal agreement is reached. That stance keeps a layer of uncertainty in the market, preventing a more dramatic price collapse. Details Of The Proposed Agreement Reports indicate that the framework under discussion includes several key elements. These include the reopening of Hormuz, the release of frozen Iranian assets, and further negotiations aimed at limiting Tehran’s nuclear program. Such measures would mark a significant shift from the current standoff. However, no final agreement exists yet. Trump emphasized that Washington will not rush the process, stating that any deal must meet strict conditions. He also framed the negotiations in stark terms, saying the outcome will either be “great and meaningful” or result in no deal at all. That statement reinforces the high stakes involved and signals that talks could still break down. Energy Markets React To Supply Outlook The Iran conflict and the dual blockade of Hormuz have disrupted global energy markets for months. Producers across the Middle East have halted millions of barrels per day in output, tightening supply and driving prices higher. Now, the possibility of restoring that output changes the outlook. Asian economies, which rely heavily on energy imports through Hormuz, stand to benefit the most from any reopening. Increased supply could ease price pressures globally and stabilize energy markets. However, traders remain cautious. Why? Because past negotiations have often stalled at critical moments. Until a deal becomes official, the risk of renewed tension remains. Markets now wait for confirmation. A finalized agreement could extend the current downtrend in oil prices, especially if supply returns quickly. On the other hand, delays or setbacks could trigger a rebound.