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(Bloomberg) -- Oil options markets are losing their bullish hue as hopes grow that Israel and Hamas will agree to a cease-fire and as Iran holds back for now on a much-anticipated retaliatory attack.

Having turned the most bullish in almost four months last week, the options market’s so-called skew — the cost of insuring against spikes or troughs in prices — has tumbled back to a bearish bias in the past few days. Traders had previously hedged against a fresh escalation in a region that accounts for about a third of the world’s oil output.

US Secretary of State Antony Blinken said Israeli Prime Minister Benjamin Netanyahu has accepted a cease-fire proposal to halt the war in Gaza and the next step is for “Hamas to say yes.” Iran’s pledged retaliation for the killing of a top Hamas official has also yet to materialize.

The move in the skew coincides with a slump in Brent futures this week that’s also been driven in part by hopes of an easing in regional tensions.

That hasn’t stopped trading of calls, however. Brent call volumes jumped to the second highest level on record on Monday, spurred by active trading of large nearby spreads that would profit from a further price rally.