World oil prices plunged 6% this afternoon following news of a truce between the US and Iran, opening the door for negotiations.

Global oil prices plunged more than 6% after the US and Iran suspended attacks over the weekend, boosting hopes of a potential resolution to the conflict through negotiations.

On July 27, 2026, at 1:38 PM, Reuters reported that global oil prices fell more than 6% after the United States and Iran temporarily halted their military attacks over the weekend. This gave investors hope that the conflict would be resolved through diplomatic negotiations and would help restore oil shipping through the Strait of Hormuz.

At 06.20:3 GMT, Brent crude oil futures for next month fell $6.20, or 6.4%, to $90.58 per barrel, after breaking below the key $90 level earlier in trading. Meanwhile, US West Texas Intermediate (WTI) crude oil fell $5.80, or 6.5%, to $83.51 per barrel. Both contracts hit their lowest levels in nearly a week after three weeks of continuous gains.

Previously, Brent crude oil prices surged to $100 per barrel after the conflict between the United States and Iran escalated, affecting oil shipments through the Strait of Hormuz and extending into the Red Sea, disrupting Saudi Arabia's oil exports to Asia via the Bab el-Mandeb Strait.

However, Mike Walz, the U.S. Ambassador to the United Nations, revealed on Fox News Sunday that President Donald Trump decided to temporarily suspend the attack to allow diplomatic negotiations to continue.

Analysts from ING stated that the fact that both sides avoided further clashes is the first clear positive sign that tensions may be beginning to ease, reflected in the rapid drop in oil prices as the market awaits good news about the situation.

Although the attacks have temporarily ceased, data from Kpler indicates that fewer than 10 cargo ships per day passed through the Strait of Hormuz over the weekend, reflecting the continued safety precautions taken by shipping operators.

Sol Kavonik, an analyst at MST Marquee, believes that shipping volumes through the Strait of Hormuz are likely to recover gradually, as operators want assurance that the situation is stable before bringing ships back onto that route.

Meanwhile, shipping through the Bab el-Mandeb Strait slowed on Sunday after Houthi rebels in Yemen attacked Saudi Arabia's oil infrastructure on the Red Sea, although one large Chinese oil tanker was still able to pass through the route.

Despite the sharp drop in oil prices, many analysts believe the oil market could receive support if supply risks persist.

Analysts from UOB stated that if oil shipments in the Middle East continue to be affected by the escalating conflict in the Red Sea, including Ukraine's attacks on Russian oil facilities and refineries, prolonged supply risks could keep oil prices at high levels and increase inflationary pressure globally.

Meanwhile, Ukraine revealed that it had attacked several energy targets in Russia over the weekend, another factor that markets are closely watching.

Reference: www.reuters.com

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