On 27 July 2026, the global oil market witnessed a significant shift as the price of oil plummeted following a pause in attacks between the US and Iran. The US ambassador to the UN announced that attacks on Iran had been halted for a second consecutive night to allow for negotiations. In response, an Iranian army spokesperson stated that Tehran had stopped retaliatory attacks in the region. As a result, Brent crude, the global benchmark for oil, dropped more than 9% to below $88 a barrel, a substantial decline from last week’s high of over $100. The conflict between the US and Iran had previously led to a sharp increase in oil prices due to the closure of the Strait of Hormuz, a crucial shipping route that carries approximately 20% of the world’s oil and liquefied natural gas. The recent halt in attacks has sparked hopes for a potential resolution to the conflict, causing oil prices to fall. The price of oil had previously fallen to around $70 a barrel in June after the US and Iran signed a memorandum of understanding to halt military operations and reopen the strait. However, the collapse of the ceasefire earlier this month reignited concerns over global energy supplies, pushing the oil price back up. The impact of the conflict on oil prices has been felt globally, with the cost of fuel such as petrol and diesel increasing in many countries. This, in turn, has led to higher prices for other goods and services, contributing to inflation. The situation has also led to expectations of interest rate increases by central banks to control price rises. The Bank of England, which holds its latest interest rate-setting meeting this week, is expected to keep its key rate unchanged at 3.75%.
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📰 Source: BBC World