Oil Prices Drop as US and Iran Pause Military Hostilities

The United States and Iran have paused military strikes after 13 days of continuous attacks, leading to a sharp decline in global oil prices and a rally in international stock markets. Brent crude fell by more than 7 percent on Monday, dropping from over 100 dollars per barrel to approximately 90 dollars. West Texas Intermediate also decreased by 4 percent to reach 85.45 dollars per barrel.

Mike Waltz, the United States ambassador to the UN, stated that President Donald Trump decided to give diplomatic conversations space before determining whether to resume attacks. This de-escalation provided relief to markets concerned about inflation and shipping disruptions in the Strait of Hormuz.

Global stock indices responded positively to the news. The Pakistan Stock Exchange gained over 7,000 points to close above 178,000, while Germany's Dax started the week with a significant increase. In Spain, the Ibex approached new historical highs. Other market movements included an increase in gold prices and a decrease in bond yields.

Despite the pause, analysts warn that risks remain. Traffic through the Strait of Hormuz continues to be severely affected, and conflict has extended to the Red Sea. Reports indicate that Houthi militia have attacked targets in Saudi Arabia, including the port of Yanbu and an Aramco oil refinery in Jazan.