Oil prices slipped further on Tuesday, edging close to wiping out the bulk of gains recorded since the onset of the conflict. Traders cited expanding supply inventories and fresh optimism surrounding a potential US‑Iran peace deal as the main drivers. The slide underscores how quickly market sentiment can reverse when geopolitical risk recedes.

Analysts note that the recent rally stemmed from fears of disrupted shipments and sanctions tightening. With diplomatic channels opening, the perceived risk premium eroded, allowing producers to increase output without triggering price spikes. The wartime gains that lifted crude to multi‑year highs now appear fragile, prompting investors to reassess exposure.

Energy firms that benefited from the earlier surge may see profit margins contract as the price correction deepens. Hedge funds adjusting positions could accelerate the decline, while downstream refiners might welcome lower feedstock costs. The market now hinges on whether diplomatic progress sustains, making the current dip a decisive test for price stability.