Oil prices moved higher in early trading after reports suggested some diplomatic efforts were helping cool tensions in the Middle East. The rebound reflected a reduced immediate risk premium in energy markets, even as traders remained alert to any renewed disruption.

The move in crude also came as investors turned their attention to a busy week for U.S. economic policy and data. Key inflation figures are due soon, and markets are looking for signals that could shape the Federal Reserve’s next interest-rate decision.

Energy traders often react quickly to changes in geopolitical risk, especially when supply routes or major producers may be affected. In this case, the market response suggests that easing tension was enough to lift sentiment, at least for now.

Still, analysts say price direction could change quickly if diplomacy stalls or if incoming U.S. data shifts expectations for the Fed. For now, oil is being driven by a mix of geopolitical relief and anticipation around the next major macroeconomic catalysts.