RoydadNaft –  Brent crude futures fell $5.70, or about 5.9%, to $91.08 a barrel. U.S. West Texas Intermediate (WTI) futures dropped $4.80, or roughly 5.4%, to $84.51 a barrel.

According to Rooydad Naft, oil prices plunged more than 5% on Monday after the United States and Iran halted their attacks at the end of last week following two weeks of mutual strikes. The pause raised hopes for a diplomatic solution, reduced tensions, and a potential resumption of shipping through the Strait of Hormuz.

Brent crude futures were trading at $91.08 a barrel as of 08:04 GMT, down $5.70 or about 5.9%. Earlier in the session the price had temporarily slipped below the key support level of $90.

U.S. West Texas Intermediate crude also declined $4.80, or approximately 5.4%, to $84.51 a barrel.

Both contracts are trading at their lowest levels in nearly a week, after prices had been on an upward trajectory for the past three weeks.

Brent had previously reached $100 a barrel as the conflict spread to the Red Sea, disrupting Saudi Arabia’s (the world’s largest oil exporter) shipments to Asia through the Bab el-Mandeb Strait.

Mike Waltz, the U.S. ambassador to the United Nations, said on Fox News Sunday and other U.S. media outlets that President Donald Trump had decided to pause American strikes to allow more time for diplomacy.

John Evans, an analyst at PVM, said: “The market always seems to be looking for good news from an arena that really offers none. A halt in military attacks may look like some kind of progress, but it offers no guarantee that oil will start flowing from the region any time soon… Prices will only continue to fall if high prices once again curb demand, not because of temporary and questionable ceasefires.”

Shipping data from Kpler showed that fewer than 10 commercial vessels a day passed through the Strait of Hormuz over the weekend.

Sol Cavonic, an analyst at MST Marquee, said: “Any recovery in flows through the Strait of Hormuz is likely to be slow and partial, as many shipping companies remain cautious and will need greater assurance of safety before sending more empty vessels into the strait.”

In addition, traffic through the Bab el-Mandeb Strait declined on Sunday after Yemen’s Houthis attacked Saudi oil facilities on the Red Sea coast, although a third Chinese very large crude carrier exited the waterway. Societe Generale analysts estimate that every month without a resolution in the Red Sea adds at least $10 to the price of a barrel of oil.

Some analysts believe markets will remain supported if supply disruptions persist due to ongoing shipping risks in the Middle East and Russia’s war in Ukraine.

UOB analysts wrote in a note: “With the Middle East conflict spreading to the Red Sea and Ukrainian drones striking Russian vessels and refineries… sustained supply disruptions are likely to keep oil prices elevated and continue to pose upside risks to global inflation.”

Ukraine said it had attacked several Russian oil facilities over the weekend.