Oil prices ease after US and Iran pause their attacks
[July 27, 2026]
NEW YORK (AP) — Oil prices eased in early trading Sunday, falling
further from a two-month high set last week, after the United States and
Iran refrained from launching military strikes in the Persian Gulf for a
second straight day.
The price for a barrel of Brent crude oil to be delivered in September
dropped 4.9% to $92.02 shortly after trading resumed. The decline
followed a 3.9% drop on Friday.
Brent crude, the international standard, briefly hit $102 a barrel last
week. That was $30 more than the most actively traded contract in the
Brent market was going for early in the month, and the highest it had
been since May.
Oil prices surged this month because of increased fighting in the Middle
East and worries a return to all-out war would further slow the global
flow of crude.
The ability of tankers to pass safely through the Strait of Hormuz has
been the central concern for the oil market since the U.S. and Israel
attacked Iran in late February. The narrow strip of water off Iran’s
coast is the route through which a fifth of the world’s oil typically
leaves the Persian Gulf and heads to customers worldwide, and the
conflict has largely halted shipping traffic.
Oil producers have since searched for alternative routes, but those are
under pressure too. Last week, attacks hit Saudi oil tankers that were
using the Red Sea to leave the region. When less oil is available for
customers to buy, the price goes up and fuel prices do as well.
In the United States, the average price for a gallon of regular gasoline
on Sunday was $4.11, up from $3.90 a month ago and just $3.15 a year
ago, according to motor club AAA.
If oil prices stay elevated, it could lead to higher prices for every
product that gets shipped, trucked or flown around the world, including
groceries. Although the U.S. economy continues to grow, the ongoing
conflict with Iran has dragged consumer confidence in it lower.
[to top of second column] |
Cars line up at the pumps of a Gulf Oil station on the Massachusetts
Turnpike near Boston Sunday, July 19, 2026. (AP Photo/Gene J.
Puskar,File)
 The reacceleration of oil prices
this month took place just as inflation had begun to slow more than
economists expected. Now, traders believe inflation pressures have
grown enough that they’re betting on a 36% chance the Federal
Reserve will hike its main interest rate at an upcoming meeting,
according to data from CME Group.
Higher interest rates would help keep a lid on inflation, but they
could also slow the economy by making it more expensive for all
kinds of Americans and businesses to borrow.
Long-term U.S. mortgage rates have already hit their highest levels
in nearly a year, for example, chilling the housing industry. And
more expensive borrowing could slow the boom in building
artificial-intelligence data centers, which have become a big engine
for the U.S. economy's growth.
While oil prices have given back some of their big July gains, much
uncertainty still remains.
The price for a barrel of benchmark U.S. oil to be delivered in
September fell 5.6% to $84.34 on Sunday. It dropped 3.1% on Friday.
In the oil market, traders are buying and selling contracts for
barrels of oil to be delivered many months in the future. The price
for a barrel of Brent crude to be delivered in October, which is now
the most actively traded part of the market, fell 4.6% to $87.48.
All contents © copyright 2026 Associated Press. All rights reserved |
