Crude oil futures slide 3% on Iran peace hopes

Diplomatic signals, Gulf tensions and weak global sentiment keep energy traders cautious over near-term market direction

Crude oil futures fell more than 3% on Wednesday as investors closely tracked diplomatic developments between the US and Iran despite recent military tensions in the Gulf region. 

 Hopes of easing geopolitical stress and possible reopening of the Strait of Hormuz weighed on oil prices in both domestic and international markets.  On the MCX, crude oil for June delivery declined by ₹274, or 3.04%, to ₹8,740 per barrel in a turnover of 11,539 lots. 

  Brokerage firm Kotak Neo said investors were balancing tentative diplomatic progress with ongoing military tensions and unresolved geopolitical risks that continue to cloud the near-term outlook for crude oil markets.

 In the global markets, Brent crude futures for August delivery slipped 2.31% to $94.44 per barrel, while West Texas Intermediate (WTI) futures fell 3% to $91.14 per barrel. According to reports, the US and Iran are continuing indirect negotiations aimed at reopening the Strait of Hormuz and reducing tensions in the region despite recent US military strikes on Iranian targets.

 The US military earlier defended the strikes, saying the operations were meant to protect American troops from threats posed by Iranian forces. Meanwhile, Iranian media reported explosions in Bandar Abbas and nearby coastal areas close to the Strait of Hormuz, keeping market participants cautious.

  US Secretary of State Marco Rubio said any agreement between Washington and Tehran could still take several days to finalise. US President Donald Trump also said negotiations with Iran were “proceeding nicely”.

—PTI