US-Iran war: Oil prices retreated on Tuesday, 5 May, after surging as much as 6% in the previous session, amid indications that the US Navy may ease Iran’s blockade of the crucial Strait of Hormuz, potentially allowing increased supply from the Middle East.
for July delivery slipped 68 cents, or 0.6%, to $113.76 per barrel, following a 5.8% jump on Monday. Meanwhile, US West Texas Intermediate (WTI) crude declined $1.59, or 1.5%, to $104.83, after rising 4.4% in the previous session.
Back home, crude oil prices on Multi Commodity Exchange (MCX) also fell marginally, tracking global prices, down 0.69% at ₹9,985 per barrel.
What’s weighing on crude oil prices today?
The US initiated a fresh operation on Monday to restore shipping through the Strait of Hormuz. Danish shipping giant Maersk said that its US-flagged vessel, Alliance Fairfax, successfully exited the Gulf via the strait under the protection of US military escorts, helping ease immediate concerns over supply disruptions, as per a Reuters report.
However, Iran responded with attacks in the Gulf the same day, escalating tensions in the battle for control of the strategic waterway. The Strait of Hormuz, which links the Gulf to global markets, typically handles nearly 20% of the world’s daily oil and gas supply.
Reports indicated that several commercial ships were hit in the region, and a major oil port in the United Arab Emirates caught fire following an Iranian strike. The US move to deploy naval forces to secure shipping marks the most significant escalation since a ceasefire was announced four weeks ago.
Washington is aiming to reopen the strait to mitigate severe disruptions to global energy flows after Iran largely blocked it following the outbreak of conflict with the US and Israel on February 28.
Crude oil prices outlook
According to Kaynat Chainwala, AVP – Commodity Research, Kotak Securities, the outlook for remains uneven.
“A credible agreement could push prices lower quickly, while renewed escalation could drive them sharply higher. Until there is clarity on negotiations, crude is likely to remain elevated and volatile,” Chainwala said.
Meanwhile, on the technical outlook, Ponmudi R, CEO of Enrich Money, said that MCX Crude Oil is trading above the ₹9,700 zone, pulling back from recent highs near ₹10,500 and hovering just below the ascending trendline, keeping the near-term structure fragile.
“A sustained move above ₹9,800 could revive momentum toward ₹9,900– ₹10,100. On the downside, ₹9,550 acts as immediate support; a breach below this level could extend the decline and expose ₹9,400– ₹9,300. The near-term bias remains cautious, with direction contingent on ongoing supply disruption developments in the Strait of Hormuz, Ponmudi said.
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