Oil Prices Plummet as US and Iran Pause Strikes in Strait of Hormuz

Oil prices plummeted to a one-week low on Monday after the US and Iran paused strikes over the weekend, following two weeks of attacks. The development raised hopes for a diplomatic solution that could de-escalate the conflict and allow shipping to resume in the Strait of Hormuz.

The price drop saw Brent crude futures fall $7.55, or around 7.8%, to $89.23 a barrel by 1102 GMT. US West Texas Intermediate crude was at $83.30 a barrel, down $6.01, or around 6.73%. Both contracts are trading at their lowest levels since July 20.

Mike Waltz, the US ambassador to the United Nations, said President Donald Trump had decided to pause US attacks to allow more time for diplomacy. However, market analysts warn that there's no signed framework, verification mechanism, or agreed timeline in place, leaving prices uncertain.

Kazakhstan has also been affected, with its daily oil output halving due to the closure of a main exporting terminal in Russia's Black Sea following drone attacks. The Caspian Pipeline Consortium's Black Sea terminal later resumed oil loadings.