Global crude oil prices fell by almost 3% on Monday following US President Donald Trump’s announcement of aid to clear vessels stuck in the Strait of Hormuz. Despite this, prices remained above $100 due to no breakthrough in US-Iran talks. Brent crude decreased by 0.61% to $107.51 per barrel, while US WTI dropped by 2.77% to $99.11 a barrel.
On the domestic front, crude oil futures on the Multi-Commodity Exchange (MCX) were trading at Rs 9,621, down Rs 44, or 0.45%, from the previous close. Trump’s mention of a potential de-escalation in the West Asia conflict led to the decline in oil prices.
Trump assured safe passage for ships through the Strait of Hormuz on Truth Social, aiming to maintain operations without disruption. Despite the price drop, oil prices remained high due to the lack of a peace agreement between the US and Iran, with shipping through the Strait of Hormuz still restricted.
Negotiations between the US and Iran continued over the weekend, with discussions on a nuclear agreement ongoing. Iran proposed deferring nuclear talks until after the conflict ends, along with easing restrictions on Gulf shipping. OPEC+ announced that seven member nations would increase output by 188,000 barrels per day in June, the third consecutive monthly rise.
However, the additional supply is unlikely to have a significant impact in the short term due to ongoing disruptions linked to the Iran conflict affecting oil flows through the Strait of Hormuz. Both domestic and global markets showed positive momentum, with benchmark indices Sensex and Nifty trading around 1% higher in the morning session. In Asia, key indices like Japan’s Nikkei, Hong Kong’s Hang Seng, and South Korea’s Kospi rose by up to 4%.
