Oil prices fell towards a one-week low on Monday after the United States and Iran paused two weeks of military strikes over the weekend, fuelling hopes that diplomacy could de-escalate the conflict and allow shipping through the Strait of Hormuz to resume. The move matters because the fighting had driven Brent crude to $100 a barrel and disrupted exports from top producer Saudi Arabia via the Bab el-Mandeb strait, so any easing of tensions carries significant weight for global energy markets, though analysts cautioned that a pause without a formal agreement offers no guarantee that supply will actually improve.

Brent crude fell $5.85, or around 6%, to $90.93 a barrel, having dropped as much as 9.5% intraday to $87.55, while U.S. West Texas Intermediate fell $4.98, or 5.6%, to $84.33 a barrel. Fewer than 10 commodity vessels passed through the Strait of Hormuz daily over the weekend, with flows down to roughly 15% of pre-war levels according to Kpler data, and analysts noted there is no signed framework, verification mechanism or timeline underpinning the truce. Complicating the picture, Saudi air defences intercepted drones launched from Iraq at oil facilities, Houthi forces targeted Saudi crude infrastructure near Yanbu, and Kazakhstan more than halved its oil output after a Black Sea export terminal closure, though that terminal later resumed loadings.