Brent falls below $90 as Middle East tensions ease

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Brent falls below $90

Highlights

Brent fell to $87.29, while WTI dropped to $84.60.
The U.S. and Iran paused military strikes over the weekend.
Shipping through Hormuz remains well below normal levels.
Middle East supply risks continue to support oil prices.

Brent crude traded at $87.29 a barrel, down 11.6% on the day, while U.S. West Texas Intermediate (WTI) fell 6.5% to $84.60 a barrel. The decline erased part of last week's war-driven rally, when Brent briefly climbed above $100 a barrel for the first time since May as shipping disruptions across the Middle East intensified, Reuters reported.

Diplomatic pause cools oil rally

The latest decline came after U.S. Ambassador to the United Nations Mike Waltz said President Donald Trump had decided to pause U.S. military operations against Iran to allow additional time for diplomatic efforts.

Markets interpreted the decision as the first meaningful sign that the conflict may not escalate further in the near term. Analysts at said investors had been searching for any indication that geopolitical risks might begin to ease after nearly two weeks of attacks that disrupted one of the world's most important energy corridors.

Even so, shipping activity remains well below normal. Data from Kpler showed that fewer than 10 commodity vessels transited the Strait of Hormuz each day over the weekend, underscoring that many operators remain reluctant to return until security conditions improve.

Shipping risks continue to support prices

Despite Monday's selloff, analysts cautioned that supply risks have not disappeared.

Traffic through the Bab el-Mandeb Strait also remained under pressure after Yemen's Houthi movement attacked Saudi oil infrastructure along the Red Sea coast. At the same time, Ukraine said it struck several Russian oil facilities over the weekend, adding another source of uncertainty for global energy markets.

Market participants expect shipping through the Strait of Hormuz to recover only gradually, as tanker operators continue to assess security risks before resuming normal operations. Any renewed disruption could quickly tighten supplies and push crude prices higher again.

Markets remain focused on supply security

Monday's decline reflects improving expectations for diplomacy rather than a complete resolution of geopolitical tensions. Brent remains well above levels seen before the conflict intensified, while tanker traffic through both the Strait of Hormuz and the Bab el-Mandeb Strait has yet to normalize.

With two critical global shipping routes still operating below normal capacity and additional disruptions linked to the Russia-Ukraine war, energy markets remain highly sensitive to political developments. Any breakdown in diplomatic efforts could quickly reverse the latest decline in crude prices.

Earlier, we reported that Houthis threaten Saudi shipping as oil market risks deepen.

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