Oil prices have fallen sharply after the United States and Iran paused military strikes over the weekend, raising hopes that diplomatic efforts could ease the conflict.
Brent crude fell more than five per cent, while U.S. West Texas Intermediate also declined by a similar margin. The market reaction reflects expectations that shipping through the strategically important Strait of Hormuz could gradually resume, easing concerns about global oil supplies.
However, the pause in fighting has not yet produced a formal agreement, and traffic through the waterway remains well below normal levels.
Analysts say oil markets are likely to remain volatile, with prices sensitive to developments in the conflict, shipping disruptions and the prospects for a lasting diplomatic resolution.
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