On Monday morning, a single barrel of Brent crude lost more than six dollars in value within hours. The international benchmark fell by over 6.5%, touching $105.55, its lowest level since 16 October.

Traders were not reacting to a signed agreement, since none exists, but to the possibility of one after eight months of war between Iran and the United States. The triggers were diplomatic rather than physical. Iran's foreign minister, Abbas Araghchi, told state media that consultations through mediators were "very intensive", and Qatari officials spent the weekend working on the release of more than $6bn in frozen Iranian assets, a possible price for reopening the strait of Hormuz. US vice-president JD Vance spoke of "a number of good conversations" and cautious optimism about a negotiated settlement.

Reports that Iran's supreme leader, Mojtaba Khamenei, had given his government fresh powers to negotiate added to the mood. The effects spread quickly beyond the oil market. Airline shares rose, because fuel is one of their largest costs. In Britain, the yield on 10-year government bonds dropped by 10 basis points, to its lowest since 22 September, as investors bet that cheaper energy could ease inflation and reduce pressure on central banks.

Yet the relief looks fragile. Donald Trump told an Iowa rally that Iran would get "the hammer" if progress stalled, and IG analyst Chris Beauchamp warned that Washington might still make "one last throw of the iron dice" after the US midterm elections.