Global crude prices fell around 2% on Tuesday morning after US president Donald Trump announced to defer a planned military strike on Iran.
At 8:15 AM, the July contract of Brent on the Intercontinental Exchange was trading at $109.68 per barrel, lower by 2.16% from its previous close, while the June contract of the NYMEX fell 1.61% to $102.70 a barrel.
On Monday, Trump said that he shelved plans for a “scheduled attack of Iran” following requests from the leaders of Qatar, Saudi Arabia and the United Arab Emirates. Further, the extension of the waiver on the US sanctions on import of Russian oil also eased the supply concerns.
The war and the subsequent blockade of the and the naval blockade of Iran by the US have choked global oil supplies, with companies including Indian firms facing the brunt through energy shortages. The Strait of Hormuz is a key channel for 20% of global oil and gas trade.
In a post on Truth Social, he wrote:
“I have been asked by the Emir of Qatar, Tamim bin Hamad Al Thani, the Crown Prince of Saudi Arabia, Mohammed bin Salman Al Saud, and the President of the United Arab Emirates, Mohamed bin Zayed Al Nahyan, to hold off on our planned Military attack of the Islamic Republic of Iran, which was scheduled for tomorrow, in that serious negotiations are now taking place, and that, in their opinion, as Great Leaders and Allies, a Deal will be made, which will be very acceptable to the United States of America, as well as all Countries in the Middle East, and beyond.”
Earlier in the day, the US president told the New York Post that Iran knows “what’s going to be happening soon.” He, however did not give any further details.
Fragile ceasefire
Such statements and rhetoric, and lack of clarity over a peace deal, have kept concerns alive over the continuity of the reached between Iran, the US and Israel on 8 April.
American news website Axios reported that Trump had been weighing renewed military action after Tehran’s latest proposal in talks aimed at ending the conflict fell short of expectations.
Speaking at a White House event later on Monday, Trump also said:
“We were getting ready to do a very major attack tomorrow.”
“I put it off for a little while, hopefully maybe forever, but possibly for a little while” because “we’ve had very big discussions with Iran, and we’ll see what they amount to,” he added.
India impact
Despite the easing in global crude, domestic fuel prices were raised again. On Tuesday, by around 90 paise per litre — the second hike within a week.
In the national capital, petrol prices rose from ₹97.77 to ₹98.64 per litre, while diesel increased from ₹90.67 to ₹91.58 per litre, according to data from Indian Oil Corp Ltd.
Prices were earlier hiked by ₹3 per litre on Friday, 15 May, after a gap of four years.
Following Friday’s increase, state-owned oil firms have reduced their combined daily losses to ₹750 crore from ₹1,000 crore, Sujata Sharma, joint secretary, petroleum ministry, told reporters on Monday. The losses—borne primarily by public sector fuel retailers—had surged in recent months due to elevated crude oil prices and a mismatch between international fuel costs and domestic retail prices.