Crude Oil Prices Decline 6% Amid Speculation of US-Iran Peace Deal; MCX Crude Below ₹8,800 per Barrel

Crude Oil Prices in India Slip 6% Amid Optimism Over US-Iran Peace Talks

Crude oil prices in India plummeted 6% in early trade on Monday, following a significant slump in international oil prices. The optimism surrounding the US-Iran peace talks and the reopening of the crucial Strait of Hormuz contributed to the decline. The MCX crude oil price for June futures opened 4% lower at ₹8,802 per barrel, compared to its previous close of ₹9,168.

The oil price dropped as much as 5.95% to a low of ₹8,622 per barrel. At 9:55 AM, the MCX crude oil rate was trading 4.94% lower at ₹8,715.00 per barrel. In the international market, Brent crude futures declined 5.7% to $97.69 a barrel, while US West Texas Intermediate were at $90.85 a barrel, down 6%. Both contracts touched their lowest since May 7 earlier in the session.

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The decline in crude oil prices globally is largely attributed to the optimism that the United States and Iran are moving closer to a peace deal. However, both countries remain at odds over key issues, such as blockades on the Strait of Hormuz. US President Donald Trump on Saturday said that Washington and Iran had "largely negotiated" an understanding on a peace deal that would reopen the Strait of Hormuz.

The Strait of Hormuz is a critical waterway that carries roughly one-fifth of global oil and LNG shipments. A full reopening of the Strait would provide significant relief for major Asian economies and could push oil prices substantially lower. Jigar Trivedi, Senior Research Analyst at IndusInd Securities, noted that the Iran conflict and the dual blockade of Hormuz have severely disrupted global energy markets, forcing Middle Eastern producers to halt millions of barrels per day in crude output.

The elevated crude oil prices led Indian oil marketing companies to hike retail petrol and diesel prices four times in less than 10 days. On Monday, petrol prices were raised by ₹2.61 per litre, taking the rate in Delhi to ₹102.12, while diesel prices were increased by ₹2.71 per litre.

According to Trivedi, the outlook for MCX crude oil prices remains weak for the intraday session. He noted that the MCX crude oil price for June contract has support near ₹8,600 per barrel, while resistance is placed at ₹8,800 per barrel. Ponmudi R, CEO of Enrich Money, also provided a forecast, stating that the immediate resistance for MCX crude oil prices stands at ₹8,900 – ₹9,000, and a sustained move above this zone could trigger a recovery toward ₹9,100 – ₹9,200.

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