Oil prices fell by 7% to a weekly low

Oil prices fell 7% on Monday, hitting a weekly low, after the US and Iran paused strikes over the weekend following two weeks of attacks, raising hopes for a diplomatic solution that would de-escalate the conflict and allow shipping to resume in the Strait of Hormuz, UNN reports, citing Reuters.

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Brent crude futures fell $7.55, or about 7.8%, to $89.23 a barrel by 11:02 GMT (14:02 Kyiv time).

US West Texas Intermediate crude was at $83.30 a barrel, down $6.01, or about 6.73%.

Both contracts are trading at their lowest levels since July 20.

Brent crude reached $100 a barrel as the conflict, which cut oil supplies through the Strait of Hormuz, spilled over into the Red Sea, hindering exports from the world's leading exporter, Saudi Arabia, through the Bab el-Mandeb Strait to Asia.

US Ambassador to the United Nations Mike Waltz told "Fox News Sunday" and other US media that US President Donald Trump decided to pause US attacks to allow more time for diplomacy.

"The market seems to be constantly looking for good news from an arena that really doesn't provide it," said PVM analyst John Evans.

"A halt to military strikes may seem like an improvement, but it does not guarantee that oil will soon flow from the region... prices will continue to fall only if high prices again reduce demand, not dubious mini-truces," he pointed out.

"There is no signed framework agreement, no verification mechanism, and no agreed timelines, as far as we can see, it appears both sides stopped shooting on Friday," said Ole Hvalbye, market analyst at SEB Research.

Kpler shipping data showed that fewer than 10 cargo vessels passed through the Strait of Hormuz daily over the weekend.

"Flows have fallen to about 15% of pre-war levels, compared to the normal pace of shipping about 20 million barrels of oil, condensate, and refined products per day. A political pause does not bring any additional barrels to water right here and now," Hvalbye added.

Additionally, vessel traffic through the Bab el-Mandeb Strait declined on Sunday after Yemeni Houthis attacked Saudi oil facilities along the Red Sea coast, although a third Chinese supertanker exited through the Bab el-Mandeb Strait.

Elsewhere, Kazakhstan, one of the world's top 10 oil producers, more than halved its daily oil output after the closure of its main export terminal in Russia's Black Sea due to drone attacks, an industry source said on Monday.

Later, the Energy Ministry said the Black Sea terminal of the Caspian Pipeline Consortium had resumed oil loading.