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Oil prices fell over 5% on Monday after the US and Iran paused strikes over the weekend, following two weeks of attacks. The pause has raised hopes that diplomacy could help ease the conflict and eventually allow shipping through the Strait of Hormuz to return to normal.

Crude oil price on July 27

Brent crude futures dropped $4.89, or 5.05%, to $91.89, after briefly falling below the key $90 support level earlier in the session. US West Texas Intermediate crude stood at $84.64 a barrel, down $4.67, or 5.23%. The decline comes after crude prices surged 10% last week.

Both benchmarks are now at their lowest levels in nearly a week, after climbing for the previous three weeks. Brent had earlier touched $100 a barrel as the conflict disrupted oil shipments through the Strait of Hormuz and spread to the Red Sea, affecting exports from Saudi Arabia, the world’s top oil exporter, to Asia through the Bab el-Mandeb strait.

However, the pause in attacks has not yet brought shipping through the region back to normal. Fewer than 10 commodity vessels crossed the Strait of Hormuz each day over the weekend, according to shipping data from Kpler.

Traffic through the Bab el-Mandeb strait also declined on Sunday after Yemen’s Houthis attacked Saudi oil installations along the Red Sea coast. A third Chinese supertanker, however, managed to exit through the Bab el-Mandeb strait.

Also read:Oil crosses $100: A ‘perfect hurricane’ can trigger bigger shock soon

Over the week, reports emerged suggesting that Pakistan is looking at ways to help restart the stalled U.S.-Iran negotiations aimed at ending their nearly five-month-old war, a Reuters report said, adding that the move follows an initiative from China.
Yemen’s Iran-backed Houthi movement announced a naval blockade against Saudi Arabia, a close ally of Islamabad that signed a mutual defence treaty with Pakistan last year. Pakistan depends on Saudi financial support and has strongly condemned recent Houthi attacks on Saudi Arabia. Taking a position that is seen as too sympathetic to Iran could therefore strain ties with Riyadh.At the same time, Islamabad is heavily reliant on Beijing, which has also provided significant financial support and has economic interests in a diplomatic resolution that would help reopen important trade routes across the Middle East.

What’s next for prices?

JPMorgan said in a note that every additional month of disruption to oil supplies could push Brent prices up by around $7 to $8 a barrel. If the disruption continues for three months, the bank expects monthly average Brent prices could climb to around $114 a barrel.

Goldman Sachs has warned that Brent crude could reach $120 a barrel if shipping through the Strait of Hormuz, the world’s most important oil transit route, remains disrupted. Its base case, however, is that tensions in the Middle East will eventually ease.

If the conflict subsides, Goldman Sachs expects Brent to average $80 a barrel in the fourth quarter and $75 next year. The bank said the risks to those forecasts remain “tilted to the upside”, citing the possibility of prolonged disruptions to shipping through both the Strait of Hormuz and the Red Sea.

Anindya Banerjee, Head of Commodity Research at Kotak Securities, said geopolitical developments were once again driving crude oil prices. “Any strike on major Gulf export infrastructure could force a retest of $95-100 and beyond,” he said.

Read more:Indian refiners scout new crude sources as Gulf risks rise

Banerjee said the market was now looking beyond military strikes and increasingly focused on the weakening prospects of a diplomatic breakthrough. Tehran has imposed new conditions for restarting negotiations, he said, while each new development is pushing back the return of normal tanker traffic through the Strait of Hormuz. Shipping activity through the waterway continues to remain well below pre-war levels.

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The tech-heavy Nasdaq ‌fell as investors sold chip stocks on worries about massive spending on artificial intelligence ahead of the next batch of megacap earnings reports, while falling oil prices provided Wall Street with some support ‌even as Middle East hostilities continued.

Shein says it swung to a quarterly loss as its sales slowed after US President Donald Trump removed an import duty exemption on small packages.

It also comes as uncertainty remains over the tit-for-tat US-China tariffs wars, which is currently paused.

The fast-fashion giant, which has its headquarters in Singapore but was founded in China, said it lost $99m (£74.1m) in the first three months of the year, compared with a net income of $395m a year earlier.

The announcement is part of the firm’s preparations ahead of its stock market debut in Hong Kong, although the filing did not give any details on the size, timetable or pricing of the planned initial public offering (IPO).

“In response to the increased duties and taxes, we are pursuing a wide range of options, including increasing our prices in the US market to offset a portion of the increased costs,” Shein said in the filing.

The company also said the Iran war had hit demand, increased costs and caused delays of deliveries in some markets.

The first-quarter figures also partly reflected a paper loss of $328m due to an accounting change for special investor shares. The shares can be turned into ordinary stock later, and their value can change before a listing.

The filing showed that in the year to the end of March 2026 Shein had 281 million active customers – a rise of more than 16% on a year earlier – who placed a total of more than one billion orders.

On 10 July, the China Securities Regulatory Commission (CSRC) gave Shein approval for a Hong Kong share sale after failed attempts to list in New York and London.

The Hong Kong share listing is expected to take place in the coming months.

The figures show the impact of a Trump-signed executive order to end a global tariff exemption that had been used by US shoppers of low-cost goods.

That order, which came into effect on 29 August 2025, broadened an earlier presidential action which specifically targeted cheap products from China and Hong Kong to cover the rest of the world.

The so-called de minimis exemption had allowed goods valued at $800 or less to enter the US without paying any tariffs. US consumers relied on the exemption to buy cheap goods from online commerce sites like Shein and Temu.

The White House said the global exemption was being used to “evade tariffs and funnel deadly synthetic opioids” to the US.

“The removal of the US de minimis exemption has had an adverse impact on our sales in the US and the overall growth of our net revenues,” Shein said in the filing.

Earlier in July, the European Union imposed a €3 (£2.56; $3.42) levy on low-value e-commerce imports.

The measure is aimed to curb what the trading bloc has said is unfair competition from China.