Iran's Proposal Sparks Crude Price Drop as Strait of Hormuz Hopes Rise
Crude oil prices plummeted by 3% to ₹8,572 per barrel on Tuesday after Iran signaled a possible reopening of the Strait of Hormuz. This development eased fears of prolonged disruptions to global energy supplies.
On the Multi Commodity Exchange (MCX), crude oil futures for October delivery declined by ₹264, or 3%, to ₹8,572 per barrel. Analysts said the latest selling came after reports that Iran has proposed reopening the Strait within seven days if the United States lifts its blockade on Iranian ports.
Kaynat Chainwala, AVP Commodity Research at Kotak Securities, stated that crude extended losses on Tuesday with Brent slipping below $99 a barrel to the lowest level in two weeks. The report triggered fresh selling as traders read the proposal as a fresh de-escalation signal ahead of this week's UN General Assembly.
Chainwala added that until a concrete outcome emerges from this week's meetings, crude's risk premium looks vulnerable to further unwinding, though stalled talks could just as quickly reverse the move.