A temporary pause in hostilities between the US and Iran sent crude prices sliding to a one-week low on Monday, but analysts caution that the reprieve is far from a lasting solution. The market’s relief rally quickly gave way to skepticism as fresh attacks on Saudi oil infrastructure underscored the fragility of any diplomatic opening. Main Developments Brent crude futures dropped $5.85, or roughly 6%, to settle at $90.93 a barrel by early afternoon GMT, after earlier plunging as much as 9.5% to $87.55. US West Texas Intermediate fell $4.98, or about 5.6%, to $84.33 a barrel, touching an intraday low of $82.12. Both contracts hit their weakest levels since July 20 during the session. Prices pared some losses following reports that Saudi Arabia’s air defenses intercepted and destroyed drones launched from Iraq targeting oil facilities in its Eastern Province and Riyadh. Saudi Arabia’s foreign ministry asserted the right to respond to what it called “the aggression.” Read also: Why Pakistan's economic freedom score hides a deeper crisis Yemen’s Iran-aligned Houthis separately claimed they attacked sensitive crude supply and transport links connecting eastern Saudi Arabia to the Red Sea city of Yanbu. Meanwhile, fewer than 10 commodity vessels passed through the Strait of Hormuz over the weekend, according to shipping data from Kpler, down from a normal flow of roughly 20 million barrels per day of crude, condensate, and products. Background The conflict escalated two weeks ago, pushing Brent crude briefly above $100 a barrel as attacks disrupted oil shipments through the Strait of Hormuz and spilled over into the Red Sea. The Red Sea disruptions hindered exports from Saudi Arabia, the world’s top exporter, via the Bab el-Mandeb strait to Asian markets. US Ambassador to the United Nations Mike Waltz told Fox News on Sunday that President Donald Trump had decided to pause US strikes to allow more room for diplomacy. However, no formal framework has been signed, and there is no verification mechanism or agreed timeline, according to SEB Research analyst Ole Hvalbye. Adding to supply concerns, Kazakhstan—one of the world’s 10 largest oil producers—more than halved its daily output after the closure of its main export terminal in Russia’s Black Sea due to drone attacks. The energy ministry later said the Caspian Pipeline Consortium’s terminal had resumed loadings. Why It Matters The pause in fighting offers only a thin cushion for global oil markets. “A stay of military strikes might seem an improvement, but it does not come with any guarantees that oil will soon flow from the area,” said PVM analyst John Evans. “Prices will only continue lower if high prices once again dent demand, not questionable mini-ceasefires.” Sustained supply disruptions in the Middle East and from the Russia-Ukraine war could keep oil prices elevated, posing upside risks to global inflation, warned analysts at UOB. Ukraine reported hitting several Russian oil sites over the weekend, adding another layer of uncertainty. The Strait of Hormuz remains a critical chokepoint, and ship traffic through the Bab el-Mandeb strait fell on Sunday after Houthi attacks on Saudi Red Sea coast installations, though a Chinese supertanker did manage to exit via that route. What's Next Diplomatic talks between the US and Iran are expected to continue, but without a signed framework, the market remains on edge. Analysts will watch for any further attacks on Saudi or Iranian infrastructure, as well as the flow of vessels through key straits. Kazakhstan’s output recovery and the resumption of Caspian Pipeline Consortium loadings will be monitored for signs of supply normalization. The coming days will test whether the ceasefire holds or if renewed violence pushes prices back toward $100.