Crude oil prices hit six-week low amid Iran-US ceasefire hopes

Global crude oil prices fell to six-week lows after reports of a possible extension of the Iran-US ceasefire and prospects of reopening the Strait of Hormuz. India said refineries have adequate crude stocks and fuel supplies remain stable despite regional uncertainties

New Delhi: Global crude oil prices fell to six week lows over the weekend after reports came that the United States and Iran had tentatively agreed to extend a ceasefire and that the Strait of Hormuz could soon reopen.

US West Texas Intermediate (July delivery) settled down 1.73 per cent at $87.36 a barrel, while international oil benchmark Brent crude (August contract) fell 1.7 per cent to close at $91.12 this week.

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US President Donald Trump said he would make a final determination on a preliminary deal to prolong the truce for 60 days, while Iran’s Foreign Ministry said no final understanding had been reached and that message exchanges were continuing, as per reports.

The risk premium on crude faded in July amid growing hopes of a diplomatic de-escalation, though analysts warned significant obstacles remain before oil flows through Hormuz can be fully resumed.

Removal of mines in the Hormuz waterway, delay in restarting shut-in fields, and damage to energy infrastructure from drone and missile strikes could cause a delay in the full flow of energy supplies.
Nissos Keros — a Marshall Islands flagged crude oil tanker carrying approximately 270,000 MT of crude oil cargo for India — safely crossed the Strait of Hormuz and is expected to arrive at Visakhapatnam on June 3, an official statement said.

All oil refineries in the country are operating at high capacity with adequate crude inventories, while sufficient stocks of petrol and diesel are being maintained. Domestic LPG production from refineries has been increased to about 52 TMT/day to support domestic consumption.

In addition, the government has asked states to monitor and review district wise diesel and petrol offtake patterns, intensify inspections and enforcement activities in vulnerable areas and along major transportation or industrial corridors to prevent unauthorised procurement of diesel through retail outlets by industrial and commercial consumers, and initiate prompt penal action against violators.