Oil Prices Tumble 5% as US and Iran Pause Strikes, Raising Hopes for Strait of Hormuz Diplomacy

Oil prices tumbled more than 5% on Monday as the United States and Iran paused military strikes over the weekend following two weeks of escalating attacks, fueling hopes that a diplomatic solution could de-escalate the conflict and restore shipping through the Strait of Hormuz. Brent crude futures fell $5.70 to $91.08 a barrel, briefly dipping under the $90 support level. The pause marks the first significant break in hostilities since the conflict flared in late February. The Strait of Hormuz, through which roughly 20% of the world’s oil passes, had become contested waters, with Iran targeting commercial vessels and the US Navy responding. “The market is pricing in a genuine de-escalation scenario for the first time in months,” said a UOB analyst. The S&P 500 edged up to close at a record 6,389.77. However, analysts cautioned the situation remains fragile — previous ceasefires have collapsed within days. US gasoline prices remain at $4.11 per gallon, up from $3.15 a year ago. Mediators are reportedly making progress on bringing both sides back to formal negotiations.