Global oil prices fell nearly 5% on Monday after the United States paused military action against Iran, raising hopes for a diplomatic resolution and the gradual reopening of key Middle East shipping routes.

According to Reuters, Brent crude dropped $4.89, or 5.05%, to $91.89 a barrel in early trading, briefly slipping below the $90 mark. US West Texas Intermediate (WTI) crude also declined $4.67, or 5.23%, to $84.64 a barrel.

The sharp decline came after three weeks of gains driven by fears that the conflict would disrupt oil supplies. Brent crude had recently climbed to around $100 a barrel as tensions escalated and shipping through the Strait of Hormuz was severely affected.

The conflict also disrupted exports through the Red Sea, with attacks threatening shipments from Saudi Arabia, the world’s largest oil exporter, via the Bab al-Mandeb Strait.

US Ambassador to the United Nations Mike Waltz said President Donald Trump had decided to suspend planned strikes on Iran to allow more time for diplomatic efforts.

Market analysts said the move has improved investor sentiment. Tony Sycamore of IG Markets said optimism is growing that diplomacy could help restore stability, including greater clarity over navigation through the Strait of Hormuz.

Despite the easing tensions, shipping activity has yet to return to normal. Data from vessel-tracking firm Kpler showed that fewer than 10 cargo ships transited the Strait of Hormuz each day over the weekend.

Traffic through the Bab al-Mandeb Strait also remained below normal after Yemen’s Houthi group reportedly attacked Saudi oil facilities along the Red Sea coast, although a Chinese supertanker successfully passed through the waterway.

Saul Kavonic, an analyst at MST Marquee, said shipping companies are expected to resume operations cautiously, with many remaining reluctant to send vessels through the Strait of Hormuz until security conditions improve further.