Oil falls below $88 on easing U.S. Iran tensions

July 28, 2026 (MLN): Oil prices extended their decline on Tuesday as signs of a temporary easing in tensions between the United States and Iran reduced immediate fears of disruptions to global energy supplies.

Currently, Brent crude futures is down, 3.75%, at $87.22 per barrel, according to data by Mettis Global.

West Texas Intermediate (WTI) crude futures is down by $1.98, or 2.37%, to $81.58 per barrel by [09:16 am] PST.

Although Iran denied reports that it had agreed to a 10-day ceasefire with the United States, the absence of fresh military action has led markets to believe that the conflict may be entering a brief period of calm.

The shift in sentiment followed reports that the United States had delayed plans for a larger military operation against Iran.

According to The New York Times, President Donald Trump decided against a proposed large-scale strike after concerns were raised over U.S. weapons stockpiles. Earlier, Axios had reported that Trump was considering a "massive attack" on Iran.

Speaking to reporters aboard Air Force One on Monday while traveling to Michigan, Trump rejected claims that the U.S. military was facing ammunition shortages, stating that the country had "plenty" of military ordnance.

In a research note issued Tuesday, the Commonwealth Bank of Australia said the recent pullback in oil prices reflected lower expectations of an immediate escalation in the U.S.-Iran conflict, according to CNBC.

However, the bank cautioned that risks to global energy markets remain significant. It noted that while the pause in hostilities has eased concerns over potential attacks on civilian and energy infrastructure, unresolved tensions surrounding the strategic Strait of Hormuz could quickly trigger renewed conflict and disrupt global oil supplies.

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