Oil Prices Drop 6% on US‑Iran De‑escalation
On Monday, 27 July 2026, Brent crude futures were down 6.0% at $91.00 a barrel and U.S. West Texas Intermediate (WTI) futures fell 5.5% to $84.34 a barrel as of 09:22 ET (13:22 GMT). The sharp retreat wiped out most of the war premium that had briefly pushed Brent above the $100‑a‑barrel mark the previous week when the Iran‑U.S. conflict threatened to widen beyond the Strait of Hormuz into the Red Sea.
The de‑escalation followed a pause by Washington in its bombing campaign after 13 consecutive nights of strikes. A New York Times report indicated the White House was concerned that continued attacks could deplete the U.S. stockpile of critical armaments. U.S. Ambassador to the United Nations Mike Waltz later said President Donald Trump was aiming to give “talks some space.” An Iranian official told Reuters that Tehran would suspend retaliatory attacks as long as the U.S. pause remained in place, while both sides warned they remain prepared to resume hostilities if negotiations break down.
ING analysts noted that the price action “clearly reflects the market’s desperation for positive news” and cautioned that there is little explanation from Washington for the halt, making it too early to conclude the conflict has entered a durable easing phase.
Despite the easing signals, shipping disruptions continue to keep supply concerns alive. Vessel traffic through the Strait of Hormuz fell over the weekend, and traffic through the Bab el‑Mandeb Strait – a key conduit linking the Red Sea and the Gulf of Aden – also slowed after Houthi attacks on Saudi oil facilities.
ANZ observed that the market has so far absorbed the disruptions through lower Chinese crude imports, emergency stock releases and alternative Saudi export routes that bypass the Strait of Hormuz. However, the bank warned that these buffers are becoming increasingly stretched as strategic stockpiles decline, commercial inventories tighten, and risks to shipping through both the Strait of Hormuz and the Bab el‑Mandeb remain elevated.
(Roushni Nair contributed reporting)