Oil extends slide as U.S.-Iran talks raise hopes of lasting de-escalation

in Oil & Companies News 28/07/2026

Oil prices extended losses in Asian trade on Tuesday as hopes for renewed talks between the United States and Iran continued to ease concerns over a broader disruption to Middle East crude supplies.

As of 21:23 ET (01:23 GMT), Brent Oil Futures fell 1.3% to $87.24 a barrel, while Crude Oil WTI Futures lost 1.2% to $81.61 a barrel, extending sharp losses after both benchmarks tumbled more than 9% in the previous session.

The latest losses came as investors continued to unwind last week’s rally, with signs of de-escalation prompting traders to scale back bets that the conflict would severely disrupt global oil exports.

Crude has reversed sharply over the past two sessions after briefly pushing Brent above $100 a barrel last week, underscoring how quickly prices have swung on shifting expectations around supply risk. That backdrop matters for a market that is being driven not only by immediate flows, but also by whether key transit routes and export facilities remain exposed.

Diplomatic hopes keep pressure on crude

Sentiment improved after President Donald Trump said Washington and Tehran were engaged in talks aimed at ending the conflict, following his decision to suspend further U.S. strikes and allow negotiations another opportunity.

Iran also halted retaliatory attacks after the U.S. pause, while reports indicated China had been working to revive diplomatic efforts between the two sides.

IG senior market analyst Tony Sycamore said the more than 9% selloff reflected growing confidence that an off-ramp to the conflict had emerged, easing immediate fears over attacks on Middle East energy infrastructure.

However, he cautioned that the pause remained fragile and that markets were still waiting for concrete evidence of lasting diplomatic progress before fully pricing out geopolitical risks.

Shipping disruptions still cloud supply outlook

Despite improving sentiment, Sycamore noted there has been little meaningful recovery in tanker traffic through the Strait of Hormuz, while flows through the Bab el-Mandeb Strait also remain well below normal. That keeps attention on physical shipment data, since headline diplomacy can move sentiment faster than ships can resume normal routes.

He added that markets will be closely watching whether negotiations can deliver greater clarity over navigation through the Strait of Hormuz, with any breakdown in talks — or renewed attacks on Saudi export infrastructure — likely to rebuild the geopolitical risk premium in crude prices.

Negotiators from Iran and Oman are continuing discussions aimed at restoring shipping through the strategically vital waterway, which normally carries around a fifth of global oil flows.

A successful agreement could pave the way for broader U.S.-Iran talks, although uncertainty over the durability of the diplomatic pause continues to keep traders on edge.

Elsewhere, markets continued to monitor supply developments after Kazakhstan’s main oil export terminal resumed loadings following earlier disruptions caused by Ukrainian drone attacks, helping ease concerns over near-term crude availability.

Source: Investing.com