Global crude oil prices hit a six-week low following news of a potential extension of the ceasefire between the United States and Iran, along with the possible reopening of the Strait of Hormuz. US West Texas Intermediate closed down 1.73% at $87.36 a barrel, while Brent crude fell 1.7% to $91.12 for the week. US President Donald Trump is considering a 60-day extension for the truce, while Iran’s Foreign Ministry mentioned ongoing message exchanges without a final agreement.
The risk premium on crude oil decreased in July amidst optimism for diplomatic progress, although challenges remain before normal oil flow through the Strait of Hormuz can resume. Factors such as mine removal in the waterway, delays in restarting oil fields, and damage to energy infrastructure from drone and missile attacks could impede the full resumption of energy supplies.
A Marshall Islands-flagged crude oil tanker named Nissos Keros, carrying around 270,000 MT of crude oil cargo for India, safely passed through the Strait of Hormuz and is expected to reach Visakhapatnam by June 3. Indian oil refineries are currently running at full capacity with ample crude stockpiles, while maintaining adequate supplies of petrol, diesel, and domestic LPG production from refineries has been increased to support local demand.
Furthermore, the government has instructed states to monitor district-wise diesel and petrol consumption patterns, intensify inspections in vulnerable areas and major transportation routes to prevent unauthorized fuel procurement, and take swift punitive action against violators.
