Oil has retraced roughly half of its rally from a pre-escalation low to last week's peak, a retreat driven by genuine diplomatic progress rather than fading headlines. Iran's foreign minister held direct talks with Saudi and Omani counterparts, and Oman proposed a formal mechanism to manage Strait of Hormuz shipping. The same day, Saudi Arabia intercepted drones aimed at petroleum facilities and a separate strike was claimed against the kingdom's Hormuz bypass pipeline, a reminder that the underlying tail risk has not fully cleared.
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