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SINGAPORE: Global oil prices fell by more than 5% on Monday after the United States paused military strikes on Iran, boosting market optimism that the two-week conflict could give way to diplomacy and reduce the risk of prolonged disruptions to global energy supplies.
Brent crude futures dropped by nearly 5% to around $91.90 per barrel, while U.S. West Texas Intermediate (WTI) crude declined more than 5% to approximately $84.30 per barrel, reversing part of the sharp gains recorded during the recent escalation in Middle East tensions.
The decline followed U.S. President Donald Trump’s decision to suspend further strikes on Iran after two weeks of hostilities, with U.S. officials indicating the pause is intended to allow more time for diplomatic efforts. The move has raised hopes that tensions could ease and shipping through the strategically vital Strait of Hormuz may gradually resume.
Despite the market’s positive reaction, analysts cautioned that energy supply risks remain elevated. Commercial shipping traffic through the Strait of Hormuz continues to be significantly below normal levels, while vessel movements in the Red Sea have also slowed following recent Houthi attacks on Saudi Arabian oil infrastructure.
Market observers noted that although the temporary pause in hostilities has eased immediate fears of supply disruptions, the geopolitical situation remains fragile. Any renewed escalation involving Iran or disruptions to key maritime trade routes could quickly reverse the decline in oil prices and reignite volatility across global energy markets.
