Oil prices experienced a significant decline on Sunday, with Brent crude, the international benchmark, falling approximately 5.7% to about $91.30 per barrel. US crude also decreased by roughly 5.4% to $84.43 per barrel. This drop in oil prices occurred amid a perceived pause in military operations between the United States and Iran, following a period of intense conflict in the Persian Gulf. Renewed fighting previously caused slowdowns in traffic through the Strait of Hormuz, which accounts for about 20% of global oil supply flows.
While oil prices fell, US stock futures reacted positively to the de-escalation, with Nvidia futures seeing a gain of 1.2%, Dow Jones futures rising by 0.6%, and S&P 500 futures increasing by 0.7%. This indicates investor confidence in a potential easing of geopolitical tensions. Despite the general market optimism following the pause in strikes, gas prices in the United States continued to tick higher, reaching an average of $4.11 per gallon according to AAA. This is an increase of about 11 cents from a week prior and a 38% rise since the war began in late February.
The pause in US strikes, which had lasted 13 nights, was confirmed by Department of Defense sources, with US Ambassador to the UN Mike Waltz stating that President Trump decided to pause attacks to allow for diplomacy. A senior Iranian source affirmed that Iran would also halt its operations as long as the US maintained its pause. However, the Iranian source expressed skepticism, viewing the pause as tactical rather than a genuine shift in the US negotiating position. Despite the pause in direct strikes, the conflict broadened over the weekend with Houthi allies attacking Saudi oil installations along the Red Sea coast, highlighting ongoing regional instability.
