Crude oil prices dropped nearly 2% in futures trading on Friday, after US President Donald Trump decided to halt plans for a military strike on Iran, easing concerns about potential supply disruptions from the Middle East.
MCX Crude Oil Declines
On the Multi Commodity Exchange (MCX), crude oil for delivery in June fell by Rs 140, or 1.68%, to settle at Rs 8,204 per barrel. The business turnover stood at 12,005 lots during the session.
Market Sentiment
The decline in prices was driven by the news that Trump had called off a planned strike on Iran, which had been seen as a potential trigger for a broader conflict affecting oil supplies. Traders reacted positively to the de-escalation of tensions, leading to a sell-off in crude futures.
Analysts noted that the market had priced in some risk premium due to the geopolitical uncertainty, and the reversal of strike plans prompted a correction. However, they cautioned that the situation remains fluid and any further developments could quickly change market dynamics.
The US and Iran have been at odds over the nuclear deal and other issues, with recent incidents in the Strait of Hormuz raising concerns about oil transit. The halt in strike plans temporarily alleviates those fears, but vigilance remains high.
In global markets, benchmark Brent crude also saw losses, reflecting the broader easing of supply fears. Investors will continue to monitor diplomatic efforts and any signs of renewed conflict.
