Oil Prices Tumble as US-Iran Conflict Pauses

Oil prices plummeted by nearly 5% on Monday after the US and Iran paused their strikes over the weekend, sparking hopes of a diplomatic solution to the ongoing conflict.

The decision to pause attacks was made by President Donald Trump, according to US Ambassador to the UN Mike Waltz. 'Hopes are rising that a genuine diplomatic path may be opening,' said IG markets analyst Tony Sycamore in a note. A return to the 14-point MOU with clarity around control of the Strait of Hormuz would be a good starting point.

Despite the pause, oil shipments through the Strait remained low, with fewer than 10 commodity vessels passing through daily over the weekend. Ship traffic through the Bab el-Mandeb strait also fell after Yemeni Houthis attacked Saudi oil installations along the Red Sea coast. Analysts warn that any rebound in flows will be slow and partial due to shippers' concerns about safety.