Crude Oil Prices Continue to Fall on July 28 Despite Red Sea Risks; Persian Gulf Flows Drop to 41% of Pre-War Levels

According to Jin10, crude oil prices extended their downward trend on July 28, despite escalating Red Sea tensions, as Iran and Oman pursue an agreement to reopen the Strait of Hormuz amid reduced U.S.-Iran hostilities that have enabled diplomatic efforts. The Caspian Pipeline Consortium terminal resumed pipeline loading operations, also weighing on prices after a week-long suspension. Goldman Sachs data shows Persian Gulf crude flows have fallen to 41% of pre-war levels.

Over the past week, Red Sea crude shipments decreased by over 3 million barrels per day, driven by Saudi Arabia rerouting exports via the Suez Canal and Russia significantly reducing Red Sea crude transport. Saudi Arabia said it intercepted drones launched by Iran-backed Iraqi militia targeting oil facilities, though supply risks remain elevated.