London: US-Iran pause in strikes pushed oil prices down over 5 percent, easing fears about disruptions in key global supply routes worldwide.
Brent crude futures dropped $5.70 to $91.08 per barrel, a decline of about 5.9 percent, briefly slipping below the $90 mark in early trading. US West Texas Intermediate crude also fell $4.80 to $84.51 per barrel, reflecting a drop of roughly 5.4 percent.
Both benchmarks are now trading at their lowest levels in nearly a week. The decline followed three weeks of steady gains driven by conflict concerns. The earlier rally had pushed Brent prices close to $100 per barrel.
Market sentiment shifted after the United States and Iran paused military actions following two weeks of attacks. The development raised expectations of a diplomatic solution. It also signalled possible stability in the Strait of Hormuz, a key global oil shipping route.
US Ambassador of United Nations, Mike Waltz stated that President Donald Trump decided to pause military action to allow time for diplomacy. The pause has been viewed as a step towards reducing tensions in the region.
The conflict had disrupted oil flows through the Strait of Hormuz. The situation also affected the Red Sea. Exports from Saudi Arabia faced delays through the Bab el-Mandeb strait. These disruptions had tightened global supply and pushed prices higher in previous weeks.
Shipping activity in the Bab el-Mandeb strait showed mixed signals. Traffic declined after Yemen’s Houthi forces targeted Saudi oil facilities along the Red Sea coast. Despite the disruption, a Chinese supertanker managed to pass through the route.
Market experts also pointed to ongoing risks linked to shipping security in the Middle East. The Russia-Ukraine war continues to add uncertainty to global supply. These factors could support oil prices despite the current decline. Market direction will likely depend on how long the pause holds.
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