Brent crude fell as much as 8% on Monday after the United States and Iran stopped striking each other over the weekend, erasing most of last week’s rally. Brent futures were down $7.55, or about 7.8%, at $89.23 a barrel by 1102 GMT, the lowest since July 20. West Texas Intermediate traded at $83.30, down about 6.7%.
The drop is steep because the rally was steep. Brent reached $102 last week, its highest since May, and prices gained more than 9% over the week as President Donald Trump threatened a larger attack on Iran. Traders are now pricing a pause that neither side has put in writing.
How the weekend reset the price
US Central Command ran 13 consecutive nights of strikes on Iran before the bombing stopped late Friday, with no formal announcement. Iran then indicated it would suspend attacks for as long as the US refrains from striking, according to a senior Iranian official cited by Reuters. Mike Waltz, the US ambassador to the United Nations, said Trump was “giving the talks some space” before deciding whether to resume strikes.
Supply news pushed the same way. Crude loadings restarted at the Caspian Pipeline Consortium terminal on Russia’s Black Sea coast, an export route for Kazakh oil that Ukrainian drone attacks had disrupted.
Rabobank says Houthi strikes cap the downside
Rabobank senior macro strategist Benjamin Picton wrote on Monday that the risk-off trade of late last week had given way to “a massive relax”, with Brent below $92 a barrel, equity futures higher and sovereign bond yields lower. He added that conflict in the region, including Houthi attacks on Saudi infrastructure and uncertainty over the Strait of Hormuz, still carries energy security risks that could re-tighten the market quickly.
Rabobank’s commodity strategists have kept their Brent forecasts at $80 a barrel for the third quarter and $78 for the fourth, arguing crude supply is more resilient than refining capacity. Spot prices remain well above both figures.
Yanbu carries Saudi exports while Hormuz stays shut
Houthi forces claimed ballistic missile and drone attacks on Aramco facilities at Jizan and Yanbu on July 25, their first strikes on Saudi oil sites since 2022. A fire broke out at the Jizan refinery, which processes about 400,000 barrels a day. At Yanbu, two ballistic missiles aimed at oil installations were intercepted by a Patriot battery. Neither Saudi Arabia nor Aramco has confirmed the attacks or issued a damage assessment.
Yanbu matters more than usual. The Strait of Hormuz has been effectively closed since late February, and Kpler shipping data cited by AFP showed all of Saudi Arabia’s seaborne crude exports left from Yanbu in April and May, 92% in June and 78% so far in July. The Houthis declared a maritime blockade of Saudi ports effective July 20 at 12:00 UTC, warning that vessels calling at Saudi terminals could be targeted.
Hormuz talks set the next test
Negotiators from Iran and Oman are working on an agreement to restart shipping through the strait, which would clear the way for the US and Iran to resume war talks. Iranian foreign ministry spokesman Esmaeil Baghaei said on July 26 that progress had been made without giving details. Two regional sources told CBS News the diplomacy needs more time to reach a deal.
Monday’s fall leaves Brent up close to 25% for the month. For traders, the near-term signals are narrow: whether US strikes resume, whether the Houthis hit Yanbu again, and whether tankers start booking Saudi cargoes at pre-blockade rates.
