Crude Oil Prices Decline 2% Following Trump's Decision to Suspend Iran Strike

Oil Prices Decline Amid US-Iran War Tensions

Oil prices witnessed a decline of over 2% during early Asian trading on Tuesday, following US President Donald Trump's announcement that he had put a proposed attack on Iran on hold to create room for negotiations aimed at ending the Middle East conflict.

The price drop was reflected in the Brent crude futures for July delivery, which fell by $3.01, or 2.7%, to $109.09 per barrel. In contrast, US West Texas Intermediate (WTI) crude for June delivery slipped by $1.38, or 1.3%, to $107.28 per barrel. The June WTI contract is set to expire on Tuesday, while the more actively traded July contract declined by $2.06, or 2%, to $102.32 a barrel.

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Back home, crude oil prices on the Multi Commodity Exchange (MCX) also witnessed a similar downward movement, falling by over 0.9% to ₹9,916 per barrel.

The decline in oil prices can be attributed to the uncertainty surrounding the talks between the US and Iran, as well as concerns that a near-complete shutdown of the Strait of Hormuz could further disrupt Persian Gulf energy supplies. Trump has repeatedly warned of possible renewed military action against Iran, although such threats have not yet materialized, while Tehran has not immediately confirmed the resumption of negotiations.

The US remains ready to launch an attack if a satisfactory agreement is not achieved, although no specific timeline has been specified. Iranian Foreign Ministry spokesperson Esmaeil Baghaei was quoted as saying by Reuters on Monday that Tehran's stance had been communicated to the US through Pakistan, but declined to share additional details.

Crude oil prices had briefly trimmed gains on Monday after Iran's semi-official Tasnim News Agency reported that Washington had proposed a temporary exemption from oil sanctions until a final agreement is reached.

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Crude Oil Price Outlook

Kaynat Chainwala, AVP - Commodity Research, Kotak Securities, said that barring a ceasefire breakthrough that meaningfully restores Hormuz flows, oil prices are likely to remain volatile and elevated. Chainwala also noted that WTI crude is likely to face key resistance at $112, and a breakout above this level could drive prices towards $120. On the downside, support is placed at $102.

Ponmudi R, CEO of Enrich Money, observed that MCX Crude Oil opened with a strong gap-up and continues to trade above the ₹10,300 mark, reclaiming earlier highs while maintaining support above the ascending trendline pattern. Immediate resistance is placed in the ₹10,450–₹10,500 range, and a sustained breakout above this zone may further strengthen the rally, taking prices towards ₹10,600–₹10,800. On the lower side, immediate support is seen at ₹10,200–₹10,100, and a breach below this range could drag prices down to ₹9,850–₹9,800.