Brent crude oil futures traded flat Monday morning despite US President Donald Trump’s decision to free vessels stranded in the Strait of Hormuz, describing the move as a ‘humanitarian gesture’.
At 10 am on Monday, July Brent oil futures were at $108.18, up by 0.01 per cent, and June crude oil futures on WTI (West Texas Intermediate) were at $101.63, down by 0.30 per cent. May crude oil futures were trading at ₹9653 on Multi Commodity Exchange (MCX) during the initial hour of trading on Monday against the previous close of ₹9665, down by 0.12 per cent, and June futures were trading at ₹9240 against the previous close of ₹9214, up by 0.28 per cent.
In a post on the social media platform Truth Social, Trump said: “Countries from all over the World, almost all of which are not involved in the Middle Eastern dispute going on so visibly, and violently, for all to see, have asked the United States if we could help free up their Ships, which are locked up in the Strait of Hormuz, on something which they have absolutely nothing to do with — They are merely neutral and innocent bystanders!
“For the good of Iran, the Middle East, and the United States, we have told these Countries that we will guide their Ships safely out of these restricted Waterways, so that they can freely and ably get on with their business. Again, these are Ships from areas of the World that are not in any way involved with that which is currently taking place in the Middle East.
“I have told my Representatives to inform them that we will use best efforts to get their Ships and Crews safely out of the Strait. In all cases, they said they will not be returning until the area becomes safe for navigation, and everything else.
“This process, Project Freedom, will begin Monday morning, Middle East time. I am fully aware that my Representatives are having very positive discussions with the Country of Iran, and that these discussions could lead to something very positive for all.
“The Ship movement is merely meant to free up people, companies, and Countries that have done absolutely nothing wrong — They are victims of circumstance. This is a Humanitarian gesture on behalf of the United States, Middle Eastern Countries but, in particular, the Country of Iran.”
Meanwhile, OPEC+ (Organization of the Petroleum Exporting Countries and allies) has agreed to increase June production quotas for its member countries.
The seven OPEC+ countries — Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman — met virtually on May 3, to review global market conditions and outlook.
An OPEC+ statement said: “In their collective commitment to support oil market stability, the seven participating countries decided to implement a production adjustment of 188,000 barrels per day from the additional voluntary adjustments announced in April 2023. This adjustment will be implemented in June 2026.”
In their Commodities Feed for Monday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said OPEC’s production increase is unlikely to be realised, given that 55 per cent of it is expected to come from Persian Gulf producers. This won’t happen amid ongoing disruptions in the Strait of Hormuz. It marks the first meeting following the UAE’s surprise exit from the group, they said.
May natural gas futures were trading at ₹270.10 on MCX during the initial hour of trading on Monday against the previous close of ₹264.50, up by 2.12 per cent.