Global oil prices recorded their biggest one-day decline since 8 April after fighting between the United States and Iran paused, easing concerns over disruptions to global energy supplies.
According to CNN, Brent crude settled at $85.87 a barrel, down 11.3 percent, while US crude fell about 7 percent to $82.61 a barrel.
US President Donald Trump said Washington halted strikes on Iran at the request of the Iranian government.
He also warned the United States would resume military action if a new ceasefire agreement was not reached.
Despite the fall in oil prices, shipping through the Strait of Hormuz remains below pre-conflict levels.
CNN reported that fewer than 10 commodity ships had passed through the waterway by Monday morning, compared with around 100 commercial vessels on a typical day before the conflict.
Analysts also warned that risks remain in the region because of possible attacks by the Houthi on shipping in the Bab al-Mandeb Strait.
In a note cited by CNN, Deutsche Bank analysts said Houthi attacks raise “the prospect of simultaneous disruption to both Gulf and Red Sea export routes.”
“So (there’s a) welcome pause from the main actors but a fragile one, especially with side battles going on”, they added.Â
