Analysts see crude oil remaining volatile despite push for US-Iran diplomacy
This story was originally published at 11:11 IST on 27 July 2026
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MUMBAI - Prices of crude oil on the NYMEX and Intercontinental Exchange Brent fell almost 5% Monday, after the US and Iran paused attacks during the weekend. While this is the first tangible signal of de-escalation, the reasons behind it are unclear, analysts at ING Economics said in a report Monday. "There's little explanation from the US. Also, it hasn't yet led to any meaningful pickup in vessel flows through the Strait of Hormuz," it said.
The US continued to hold off on its attacks against Iran Sunday, leading Tehran to halt its retaliatory strikes in the region after nearly two weeks of bombing, Al Jazeera reported. US President Donald Trump is giving talks with Iran "some space" after diplomatic efforts ramped up in recent days, CNN reported, quoting the US ambassador to the United Nations as saying.
Amid signs of a possible de-escalation between the two countries, the Houthis in Yemen have stepped up their attacks on Saudi Arabia. Ship traffic through Bab-el-Mandeb fell Sunday after the Houthis attacked Saudi oil installations along the Red Sea coast, Reuters reported, citing shipping data from Kpler Monday. "We are unlikely to see any recovery until there's clarity on whether this de-escalation is more permanent and whether vessels can navigate the strait without fear of attack," ING Economics analysts said.
Houthi military spokesperson Yahya Saree said the group struck Saudi state oil company Aramco in Jizan and Yanbu Saturday, Reuters reported. Oil loadings at Russia's Sheskharis terminal in Novorossiyk have reportedly been halted since Jul. 21. These disruptions come amid a surge of Ukrainian drone attacks on Russian energy infrastructure, the report said.
According to Kedia Advisory, crude oil production remains below pre-war levels as logistical disruptions in the Strait of Hormuz continue to limit exports. "Near-term volatility is expected to remain elevated," the brokerage said in a note.
At 1040 IST, the most active September contract of crude oil on the NYMEX was down 5% at $84.82 per barrel. The most active October ICE Brent Crude oil futures were down 4.6% at $92.28 per barrel. End
US$1 = INR 96.19
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT.
Reported by Krupa Biju
Edited by Himanshi Gupta
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