US-Iran war: Oil prices extended their sharp decline on Tuesday, 28 July, after President Donald Trump said the United States and Iran were holding talks aimed at ending the conflict in the Middle East.
West Texas Intermediate (WTI) crude slipped below $82 a barrel after plunging more than 7% on Monday, while Brent crude recorded its biggest one-day decline in over three months, settling near $88 a barrel.
What’s weighing on crude oil prices?
President Donald Trump said he had decided to pause military strikes against Iran to allow diplomatic efforts another opportunity, Axios was quoted as saying by Bloomberg. However, it remains uncertain whether the two sides have engaged in any meaningful negotiations.
Crude oil prices have witnessed sharp swings this month. Prices initially surged after tensions between the United States and Iran intensified and the conflict extended to the Red Sea, before retreating in recent days as geopolitical concerns eased. Despite the pullback, traders remain cautious as shipping activity through the Strait of Hormuz has yet to return to normal.
Meanwhile, negotiators from Iran and Oman are working to reach an agreement to restore shipping through the Strait of Hormuz, a crucial waterway connecting the Persian Gulf to global markets that typically handles about one-fifth of the world’s daily oil shipments during peacetime.
Iran’s military said it had suspended retaliatory attacks on US military bases and personnel in the region following Trump’s decision to delay further strikes. Before the pause announced on Friday, Iran had been launching near-daily attacks targeting locations in countries such as Kuwait, Bahrain, and Jordan over the previous two weeks.
Supply concerns also eased elsewhere, with Kazakhstan’s primary oil export terminal resuming operations after Ukrainian drone attacks had disrupted shipments. According to Kazakhstan’s energy ministry, two oil tankers have begun loading at the Caspian Pipeline Consortium terminal near the Russian port of Novorossiysk.
(With inputs from Bloomberg)
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
