- Global oil prices decreased amid US signals on Strait of Hormuz.
- US President Trump pledges to ensure safe passage for ships.
- OPEC+ production increase offers limited price relief to markets.
Global crude oil prices saw a notable decline on Monday, slipping nearly 3 per cent after fresh signals from the United States suggested potential easing of disruptions in the Strait of Hormuz. However, the absence of a breakthrough in US-Iran negotiations kept prices firmly above the $100 mark.
Oil Prices React to Geopolitical Signals
International benchmark Brent crude fell by 66 cents, or 0.61 per cent, to $107.51 per barrel. Meanwhile, US West Texas Intermediate (WTI) dropped $2.83, or 2.77 per cent, to $99.11 per barrel, reported IANS.
In domestic markets, crude oil futures on the Multi Commodity Exchange (MCX) were trading at Rs 9,621, down Rs 44 or 0.45 per cent from the previous close.
Trump’s Remarks Trigger Relief Rally
The easing in prices followed remarks by US President Donald Trump, who indicated that Washington would take steps to help vessels stranded in the Strait of Hormuz.
In a post on Truth Social, Trump said the US would work to ensure safe passage for ships through the restricted waterway, allowing them to continue operations without disruption.
He added that several countries, including those not directly involved in the conflict, had sought US assistance to help free vessels stuck in the region.
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Strait of Hormuz Remains a Critical Flashpoint
Despite the dip in prices, crude markets remain on edge as shipping through the Strait of Hormuz continues to face constraints.
The lack of a concrete agreement between Washington and Tehran has kept uncertainty elevated, with both sides continuing discussions over the weekend.
While the US is pushing for a nuclear agreement, Iran has indicated that nuclear talks could be deferred until after the conflict, along with a potential easing of restrictions on Gulf shipping.
Supply Boost from OPEC+ Offers Limited Relief
Adding another layer to the market dynamics, the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) announced that seven member countries would increase output by 188,000 barrels per day in June.
This marks the third consecutive monthly production increase.
However, analysts suggest that the additional supply may not significantly ease prices in the near term, given ongoing disruptions to oil flows linked to the conflict.
Markets Cheer, But Risks Persist
On the equities front, both domestic and global markets reflected positive sentiment. Benchmark indices Sensex and Nifty were trading about 1 per cent higher in early trade.
Across Asia, major indices including Japan’s Nikkei, Hong Kong’s Hang Seng and South Korea’s Kospi recorded gains of up to 4 per cent.
While hopes of easing tensions in the Strait of Hormuz have provided temporary relief to oil markets, the broader outlook remains uncertain.
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