Global oil prices have fallen by more than 5 per cent following a pause in strikes between the United States and Iran, raising expectations of diplomatic efforts that could ease tensions and restore crude shipments through the strategic Strait of Hormuz.
Brent crude futures declined by US$5.70, or 5.9 per cent, to US$91.08 a barrel, while US West Texas Intermediate (WTI) crude dropped by US$4.80, or 5.4 per cent, to US$84.51 a barrel.
The decline follows a period of market volatility during which Brent crude reached US$100 per barrel as conflict-related disruptions affected oil flows through the Strait of Hormuz and other major shipping routes.
The US Ambassador to the United Nations, Mike Waltz, said President Donald Trump had paused US attacks to allow more time for diplomatic engagement.
However, analysts warned that the market remains sensitive to supply risks, noting that the pause in hostilities does not guarantee an immediate return of oil flows.
PVM analyst John Evans said oil prices would require stronger indications of sustained peace and restored supply routes before further declines could be expected.
Shipping data from Kpler showed that vessel movements through the Strait of Hormuz remained limited, with operators continuing to exercise caution over security concerns.
Meanwhile, disruptions in the Red Sea have added further pressure to global oil supply routes following attacks on Saudi oil facilities by Yemen’s Houthi rebels.
Analysts said prolonged disruptions in key maritime routes, alongside the Russia-Ukraine war, could continue to support higher oil prices and increase risks to global inflation.
The development highlights the continued vulnerability of global energy markets to geopolitical tensions and supply chain disruptions.