Crude prices climbed after reports surfaced that the United States and Iran reached an agreement to halt mutual attacks. This diplomatic shift follows a period of heightened tension that threatened global energy security and shipping stability in a critical maritime corridor.

Market volatility spiked after a supertanker transporting Qatari crude was hit near the Strait of Hormuz. This incident raised immediate fears regarding supply disruptions and increased insurance premiums for tankers navigating the region. The sudden escalation forced traders to price in significant geopolitical risk premiums.

Investors reacted to the news of a potential de-escalation by buying into the market. While the agreement aims to stabilize the immediate conflict, the underlying tension between the two nations remains a factor for energy traders. The market is currently pricing in a reduction of the immediate threat to oil transit.