- Crude oil prices dropped amid reports of a US-Iran ceasefire extension.
- A proposed 60-day memorandum could ease tensions around Strait of Hormuz.
- This potential de-escalation offers relief to global energy markets.
Global crude oil prices moved lower on Friday after reports suggested that the United States and Iran agreed to a 60-day memorandum of understanding (MoU) aimed at extending the current ceasefire, offering fresh hope of stability in energy markets.
The decline comes after weeks of heightened volatility triggered by the West Asia conflict, which had pushed oil prices sharply higher and raised concerns about fuel supplies, inflation and economic growth across several countries, including India.
Crude Prices Slip Over 1 Per Cent
By 11:15 AM, international benchmark Brent crude was trading at $92.66 a barrel, down 1.12 per cent. US West Texas Intermediate (WTI) crude also declined 1.18 per cent to $87.86 a barrel.
The fall followed reports that Washington and Tehran were working towards a temporary framework designed to maintain the ceasefire and ease tensions around one of the world’s most critical energy routes.
While neither side has formally confirmed the agreement, markets responded positively to the prospect of reduced geopolitical risk.
Strait of Hormuz Remains the Key Focus
According to reports citing US officials, the proposed 60-day MoU would ensure unrestricted shipping through the Strait of Hormuz, a strategic waterway that handles roughly one-fifth of global oil and liquefied natural gas trade.
The reported framework would also require Iran to remove mines within 30 days and stop collecting tolls from vessels passing through the Strait.
In return, the US naval blockade would be eased in proportion to the restoration of commercial shipping activity.
However, the agreement has not yet received final approval from US President Donald Trump, while Iran has not publicly confirmed its acceptance of the proposal.
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From Military Strikes To Market Relief
The latest decline in crude prices follows a highly volatile trading session on Thursday.
Oil markets initially moved higher after reports of US strikes on a military site in Bandar Abbas heightened fears of further escalation in the conflict.
However, investor attention quickly shifted back to developments surrounding the Strait of Hormuz, with any signs of de-escalation carrying significant implications for global energy supplies.
The possibility of smoother shipping operations through the corridor has helped ease some of the immediate concerns surrounding crude availability.
Why The Development Matters For India
For India, which imports the majority of its crude oil requirements, fluctuations in global oil prices have a direct impact on inflation, fuel costs and government finances.
The recent surge in oil prices had already forced the Centre and public sector oil marketing companies to absorb a substantial portion of the increase rather than pass it entirely on to consumers.
Earlier this week, the Ministry of Petroleum and Natural Gas said public sector oil companies were collectively absorbing losses of around Rs 550 crore per day on the sale of petrol, diesel and LPG.
The ministry noted that oil companies had refrained from passing on the full impact of rising global crude prices in an effort to shield domestic consumers.
Fuel Supplies Adequate Despite Panic Buying
While assuring that supplies of crude oil, petrol and diesel remain sufficient, the ministry acknowledged that some localised shortages had emerged due to panic buying in certain regions.
Oil companies and government officials have repeatedly urged consumers not to engage in panic purchases, stressing that the country’s fuel supply chain remains operational.
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India’s Measures To Cushion Consumers
The Centre has already taken steps to soften the impact of elevated crude oil prices.
On March 27, 2026, the government reduced excise duty on petrol and diesel by Rs 10 per litre.
According to the Petroleum Ministry, Indian retail fuel prices have risen by only 8-9 per cent since the crisis began, compared with increases ranging between 20 per cent and 67 per cent in several neighbouring economies.
Markets Watching Next Steps Closely
Despite Friday’s decline, oil markets remain highly sensitive to developments in West Asia.
Any formal confirmation of the reported US-Iran understanding could provide further relief to global energy markets. However, uncertainty remains until both sides publicly endorse the proposed arrangement.
