International oil prices declined around 5% on Wednesday morning amid hopes of a ceasefire in the war between the US-Israel and Iran, after the US president reiterated that talks are underway and reports suggested Washington has shared a 15-point plan to end the war.
Iran, however, has denied any direct negotiations with the US. US president Donald Trump on Tuesday said that vice president JD Vance and secretary of state Marco Rubio are leading negotiations with Iran. CNN reported that Iran is willing to listen to “sustainable” proposals to end the war.
At 8:15 AM, the May contract of benchmark on the Intercontinental Exchange was trading at $98.87 per barrel, down 5.59% from its previous close. Similarly, the May contract of West Texas Intermediate on the NYMEX fell 4.33% to $88.31 per barrel.
Earlier, Israel’s Channel 12 reported that Washington is seeking a one-month ceasefire to enable talks. A report from the New York Times also said the US has sent Iran a 15-point plan to end the conflict.
Despite these signals, hostilities remain intense. According to an Al Jazeera report early on Wednesday, US and Israeli attacks on Iran continued, with one strike on Tehran killing 12 people and injuring 28 others.
Iran and Hezbollah have also launched a fresh wave of missiles at Israel, targeting Tel Aviv and northern regions, killing at least one person and injuring several others, the report added.
From highs
Crude prices have now eased from last week’s highs of around $119 per barrel.
However, volatility has pushed up India’s crude import costs. As of 23 March, the Indian crude basket stood at a record $157.04 per barrel. So far in March, it has averaged $121.64 per barrel, significantly higher than $69.01 in February.
The Indian basket comprises a mix of sour grade crude (Oman and Dubai average) and sweet grade crude (Brent dated) in a ratio of 78.71:21.29.
India impact
The ongoing conflict and blockade of the carry major implications for India, which imports nearly 90% of its oil requirement.
An increase of $1 per barrel sustained over a year can raise India’s annual import bill by about ₹16,000 crore, adding pressure on inflation and fiscal balances.
Speaking in the Rajya Sabha on Tuesday, prime minister Narendra Modi said the government is closely monitoring the situation and working strategically to address short-, medium-, and long-term impacts.
The government has also set up seven empowered groups to tackle key areas, including defence and external affairs; economy, finance and supply chains; petroleum, LNG, LPG and energy; ; essential commodities; transport and logistics; and public communication.
These groups have been tasked with identifying risks and taking immediate steps to manage the evolving global situation.