Oil prices slide over 6% on Monday

Oil prices fell more than 6 per cent on Monday after the United States and Iran paused military strikes over the weekend, raising hopes of a diplomatic solution that could ease tensions and restore shipping through the Strait of Hormuz.

Brent crude futures dropped $6.20, or 6.4 per cent, to $90.58 a barrel by 0620 GMT, while US West Texas Intermediate crude fell $5.80, or 6.5 per cent, to $83.51. Both benchmarks hit their lowest levels in nearly a week after three consecutive weeks of gains.

The decline followed reports that US President Donald Trump had decided to pause military action to allow more time for diplomacy, while analysts said the move marked the first tangible signs of de-escalation in the conflict.

Despite the pause, shipping activity through the Strait of Hormuz remained subdued, with fewer than 10 commodity vessels passing through daily over the weekend, according to Kpler. Analysts warned that any recovery in traffic is likely to be gradual as shipowners remain cautious over security risks.

Markets also continued to monitor disruptions in the Red Sea after Houthi attacks on Saudi oil facilities, as well as the ongoing Russia-Ukraine war, with analysts warning that prolonged supply disruptions could keep oil prices elevated and sustain inflationary pressures.

Attribution: Reuters