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Oil Retreats as US-Iran Deal Prospects Brighten Market Sentiment

Crude prices declined Tuesday as investor appetite for risk assets strengthened on expectations that diplomatic negotiations between the US and Iran could soon produce an agreement to restore shipping through the Strait of Hormuz.

Equity futures advanced while the dollar weakened, reflecting a shift toward riskier assets. The potential accord has sparked optimism that energy flows through the critical waterway could resume, easing supply concerns that have weighed on markets.

Wall Street extended its winning streak to its longest run since 2023, with major indices reaching record levels. Bond markets also climbed alongside the equity rally. Analysts attributed the sustained momentum to diminishing geopolitical tensions and the prospect of normalized crude supplies returning to global markets, which could help cool inflation pressures.