Crude oil prices experienced a decrease of 0.73%, concluding at Rs 8,537, as reports emerged indicating that the United States and Iran have reached a preliminary agreement to prolong their ceasefire and initiate discussions regarding Iran’s nuclear program. Reports indicate that the proposed 60-day memorandum of understanding encompasses assurances for unrestricted shipping through the Strait of Hormuz, alongside plans for Iran to eliminate mines from the area within a 30-day timeframe. The development alleviated immediate concerns regarding significant supply disruptions, although the agreement remains subject to approval from U.S. President Donald Trump.

Despite the decline, underlying supply concerns continued to support the broader market outlook. The International Energy Agency cautioned that the global oil market may approach a “red zone” in July and August, as heightened summer fuel demand aligns with diminished exports from the Middle East and declining global inventories. The agency observed that while the market initially approached the Iran conflict with surplus supplies, global stocks are now gradually diminishing. Supply disruptions from major producers continued to serve as a significant supportive factor.

In April, Russia’s crude oil production experienced a decline of 460,000 barrels per day relative to the previous year, averaging approximately 8.8 million bpd. This decrease can be attributed in part to the escalation of Ukrainian drone attacks targeting energy infrastructure. Meanwhile, U.S. inventory data from the Energy Information Administration indicated a notable decrease in crude stockpiles, which fell by 7.9 million barrels to 445 million barrels, significantly surpassing market expectations for a more modest decline. Petrol inventories declined by 1.5 million barrels, reflecting consistent fuel demand.

OPEC has revised its 2026 global oil demand growth forecast downwards to 1.17 million barrels per day, a decrease from the earlier estimate of 1.38 million bpd, which underscores apprehensions regarding the economic ramifications of the Iran conflict. Technically, the market is experiencing renewed selling pressure, evidenced by a 10.85% increase in open interest to 12,658 lots. Crude oil is maintaining support levels at Rs 8,330 and Rs 8,124, with resistance identified at Rs 8,821 and subsequently at Rs 9,106.