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Oil drops 3% on Pakistan-brokered Iran diplomacy report, weekly gain holds near 10%

7/26/2026

Oil fell roughly 3% on Friday after reports surfaced that Pakistan is pushing for new diplomatic talks between the United States and Iran, with China providing backing for that effort.

The daily decline is a price correction: a partial reversal of gains the market had already locked in on war fears earlier in the week.

Crude remains on pace for a weekly rise of around 10%, a number driven by the continuing escalation of the U.S.-Iran conflict. Why a diplomacy report moves crude prices Oil trades on expected supply.

Active conflict between the United States and Iran raises the risk that oil flows could be disrupted. When a signal arrives suggesting the conflict might ease, traders unwind some of that risk premium.

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