New Delhi: Crude oil prices retreated on Friday, with markets reacting to easing geopolitical signals in West Asia and renewed expectations of a potential US-Iran understanding that could stabilise supplies. Domestic futures reflected the softer trend, with crude oil contracts for May delivery on the Multi Commodity Exchange settling at Rs 8,396 per barrel, down Rs 180 or 2.1 percent. The decline comes as traders reassess earlier supply disruption fears that had driven prices higher in recent sessions.
Follow Energy Watch on X
A shift in market sentiment followed comments from US President Donald Trump indicating progress towards a possible agreement with Iran. “Crude futures declined after US President Donald Trump expressed optimism over a potential agreement with Iran, easing concerns over prolonged supply disruptions,” Kaveri More, Commodity, Technical Research, at Choice Broking, said.
Trump suggested Tehran could consider terms such as scaling back its nuclear programme and reopening key oil transit routes, though no formal confirmation has emerged from Iran so far.
International oil prices also moved lower during the session, although they remain elevated compared to historical averages. Brent crude hovered near USD 96 per barrel, while West Texas Intermediate (WTI) traded around USD 91 per barrel, both recording declines of over 3 percent.
The easing reflects a reduction in risk premiums that had built up amid fears of a prolonged supply shock from the region.
Adding to the downward pressure was the announcement of a 10-day ceasefire between Israel and Lebanon, which helped calm immediate concerns of further escalation. The development has led to a partial unwinding of geopolitical risk pricing, particularly around short-term supply disruptions.
Despite the pullback, the broader supply outlook remains uncertain. Concerns have also been amplified by warnings from International Energy Agency (IEA) Executive Director Fatih Birol, who said restoring disrupted oil and gas production could take up to two years. He described the situation as “the greatest energy security threat in history,” estimating a potential loss of 13 million barrels per day — more than double the supply shocks seen during the 1970s oil crises.
Birol added that disruptions in gas supplies have intensified the crisis, making it more severe than the energy market turmoil following Russia’s invasion of Ukraine.
Follow Energy Watch on LinkedIN
Analysts expect volatility to persist, with price movements closely tied to geopolitical developments. More said the near-term trend remains under pressure, with crude markets likely to respond sharply to any updates on US-Iran negotiations, ceasefire stability, and the status of critical supply routes in West Asia.
