Brent fell more than 7 percent in the first minutes of the Asian session, dropping below $90 per barrel before cutting losses and trading around $92. WTI for September delivery dropped by 8 percent to $82.70. European natural gas also decreased. However, since the beginning of the month, the benchmark grade has still risen by more than a quarter as hostilities in the Middle East have spread to the Red Sea, and Iran-backed Houthis have threatened to blockade Saudi ports.

Today's drop was driven by a pause in strikes between the US and Iran, which eased tensions in the five-month conflict. After 13 days of continuous attacks on Iran, the US suspended strikes late Friday night, raising questions about President Trump's next move. The Iranian army, for its part, stated that Tehran had also paused its retaliatory actions. Notably, just before the pause, Trump allowed for the possibility of intensifying actions, reiterating his long-standing line of escalation threats, and in an interview with Axios last week, mentioned considering a "massive attack."

There are both positive and negative scenarios for the future trajectory of prices. The pause in strikes and reports of progress in negotiations have raised expectations that a path to de-escalation is again forming, which could lead to a restoration of flows. However, there is also the downside. All key issues, including Iran's control over the strait and its missile and nuclear programs, remain unresolved, and there is a high risk that any ceasefire will only be temporary.

The Houthis in Yemen stated that they struck facilities related to Saudi Aramco in the Red Sea port cities of Jizan and Yanbu on Saturday. However, neither Riyadh nor the company confirmed this information.

Data on actual shipping confirms that shipowners remain extremely cautious, despite the announced pause. Transit through key narrow straits is still significantly below normal. Only eight cargo vessels, mainly small tankers for petroleum products, passed through the Strait of Hormuz on Sunday.

Iranian state television reported that six vessels attempting to use the southern route through the strait along the Omani coast were turned away.

Regarding the current technical picture for oil, buyers need to overcome the nearest resistance at $86.67. This would allow for a target of $92.54, above which it would be quite challenging to break through. The furthest target would be the $100.00 area. If oil falls, bears will attempt to take control of $81.38. If successful, breaking through this range would deal a severe blow to the bulls' positions and drive oil down to a low of $78.70, with the prospect of reaching $76.30.