Brent crude falls below $77 on US-Iran deal, raising hopes for lower petrol and diesel prices in India.
For some time, crude oil prices were soaring due to supply chain disruptions. But now, the market trend has reversed.
The US and Iran have agreed to reopen the Strait of Hormuz and begin 60 days of negotiations for a comprehensive agreement. Since this news broke, selling pressure has been observed in the oil market.
Brent crude, which had crossed $100 per barrel in May, has now fallen by more than 25% to below $77 per barrel. Today, Brent crude is priced at $79.46 per barrel, while WTI crude is trading at $75.60 per barrel.
People in India are closely monitoring petrol and diesel prices. When crude oil prices were rising, petrol and diesel prices in the country were increased by up to Rs 7.5.
The last price change in the country was on May 25, after which prices have remained stable. Now that international market prices are falling, consumers are hopeful that the government will soon provide relief.
The market sentiment is that a large volume of crude oil from the Middle East will soon be available in the global market. However, many analysts advise caution.
Analysts believe that merely signing an agreement will not immediately normalize supply. It will take time to clear sea mines and restart suspended production.
Due to these challenges, the full restoration of oil supply may take time, which could also affect prices.
Overall, the fall in crude oil is a positive sign, but it would be premature to expect an immediate major cut in petrol and diesel prices in India. The global supply situation and government policies will determine the final course in the coming days.
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