Crude oil prices near four-month lows as supply fear ease

Global crude oil prices remained under pressure on Wednesday, with benchmark prices hovering near four-month lows as easing geopolitical tensions in West Asia and progress in US-Iran peace talks reduced concerns over potential disruptions to global oil supplies.

International benchmark Brent crude traded more than 1 per cent lower at around $76 per barrel, while US West Texas Intermediate (WTI) fell about 1.5 per cent to hover near $72 per barrel.

Over the past month, both Brent and WTI crude have declined by more than 20 per cent as fears of prolonged disruptions to oil shipments through the Strait of Hormuz eased.

Market sentiment improved after signs emerged that oil tankers stranded in the Gulf since the beginning of the Iran conflict were preparing to resume movement through the strategically important Strait of Hormuz. Diplomatic efforts involving the US, Iran and regional stakeholders have also helped reduce concerns over global oil supplies.

The fall in crude oil prices is being seen as a positive development for India, one of the world’s largest oil-importing nations.

“This excessive volatility is favourable to India, which is growing at a steady pace. The crash in Brent crude has removed the macro headwinds for India. The rupee has stabilised and FII selling appears to have tapered off. This is positive for the market,” the experts said.

Experts added that Brent crude continuing to trade near the $76-per-barrel mark reflects easing geopolitical tensions and progress in US-Iran peace talks, which have helped alleviate concerns over global oil supplies.

Despite the recent decline in crude oil prices, analysts cautioned that uncertainties surrounding the Strait of Hormuz remain. Any disruption to shipping activity through the key trade route, which handles a significant share of global oil trade, could once again trigger volatility in global energy markets.