Global oil prices traded subdued on Wednesday morning, holding above $110 a barrel, as markets weighed mixed signals from US president Donald Trump on the prospects of the war on Iran.
At 8:11 AM, the July contract of Brent was trading at $111 per barrel, lower by 0.25%, while WTI fell 0.21% to $103.93 a barrel.
The relative calm in crude comes even as geopolitical risks remain elevated, the Strait of Hormuz stays shut, and India—heavily dependent on West Asian crude—raises retail fuel prices for the second time in a week.
Mixed signals
Trump claimed that efforts were underway to end the ongoing conflict, while also warning that Washington could launch fresh strikes if negotiations failed.
Trump told reporters that the by early next week if negotiations to end the conflict fail, noting that further attacks might become necessary, reported Al Jazeera.
Further, the US Senate has advanced a resolution to halt the military campaign in Iran unless the US president receives an explicit approval from the Congress. The resolution, however, requires a majority in the House, after which it would face Trump’s presidential veto in order to take effect.
On the other hand, Iran’s foreign minister Seyed Abbas Araghchi said in a tweet: “With lessons learned and knowledge we gained, return to war will feature many more surprises.”
Strait disruption
The closure of the has severely impacted India as prior to the war, it imported about 60–70% of its oil requirement from West Asia.
The supply shock has begun feeding into domestic pump prices.
Retail fuel prices in India were on Tuesday. Oil marketing companies increased petrol and diesel prices by around 90 paise per litre.
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 Indian crude oil basket stood at $112.79 per barrel as on 18 May. It represents a derived basket comprising Sweet grade (Brent Dated) and Sour grade (Oman & Dubai average) of crude oil imported by Indian refineries.