WTI crude fell below $95 a barrel in early Monday trading, down 3.2% to $92.87, as the US-Iran ceasefire framework announced over the weekend raised expectations that Iranian barrels could return to global markets. Brent crude slipped to $94.12, its lowest close since mid-April. The move accelerates a selloff that began Thursday when reports of progress in indirect talks first surfaced.

The ceasefire deal — brokered with Qatar and Oman serving as intermediaries — includes an initial 60-day halt to hostilities and a roadmap for de-escalation that could ultimately lead to sanctions relief. Sources familiar with the matter told Reuters that Iranian oil exports could increase by 500,000 to 700,000 barrels per day within three to six months of a full agreement, a volume that would substantially alter the supply-demand balance the market has been pricing since October.

“The market has been carrying a significant geopolitical risk premium since the Strait of Hormuz tensions flared up last fall,” said Amrita Sen, director of research at Energy Aspects. “A credible ceasefire removes the single biggest upside tail risk for crude. We’re now looking at a market that could flip from deficit to surplus by Q3 if sanctions relief materializes.”

Energy equities are feeling the heat. The XLE Energy Select Sector ETF is down 2.8% in pre-market. ExxonMobil (XOM) is off 2.3%, Chevron (CVX) is down 2.1%, and ConocoPhillips (COP) is sliding 3.4%. Independent producers are getting hit harder — Pioneer Natural Resources (PXD) is down 4.1% and EOG Resources (EOG) is off 3.7%. Refiners are a mixed bag: Marathon Petroleum (MPC) is down 1.8% while Valero (VLO) is up 0.4% on expectations that lower feedstock costs could widen crackspreads.

Natural gas is bucking the trend, up 1.8% to $2.94/MMBtu, as traders eye storage injection data due Wednesday and early summer heat forecasts for the Southeast. But for crude, the structural question has shifted: the ceasefire removes the fear bid, and the next leg lower depends on whether OPEC+ holds its production cuts steady or starts discussing unwinding them at the June 4 meeting. AP