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US-Iran war: Oil prices declined for a second straight day on Wednesday, 6 May, amid expectations that constrained supply from the key Middle East producing region could return to the market, after U President Donald Trump signalled that a potential peace deal to end the conflict with Iran may be within reach.
Brent crude futures for July dropped $1.52, or 1.38%, to $108.35 per barrel, following a 4% fall in the previous session. Meanwhile, US benchmark West Texas Intermediate crude for June slipped $1.50, or 1.47%, to $100.77, after closing 3.9% lower a day earlier.
Back home, crude oil prices on Multi Commodity Exchange (MCX) also witnessed a similar downward movement, tracking global prices. MCX crude oil prices fell 1.52% to ₹9,551 per barrel.
“MCX Crude Oil is trading near the ₹9,950– ₹10,000 zone, consolidating above the ascending trendline with price action continuing to underpin the broader bullish structure. Immediate resistance stands at ₹10,150– ₹10,250; a sustained move above this band could revive bullish momentum toward ₹10,400– ₹10,600. On the downside, ₹9,900– ₹9,800 acts as immediate support, with ₹9,700 as a stronger base should selling pressure take hold. The near-term bias remains cautiously bullish, driven by ongoing supply disruption developments in the Strait of Hormuz,” said Ponmudi R, CEO of Enrich Money.
On Tuesday, Trump unexpectedly announced a temporary pause in an operation aimed at escorting ships through the Strait of Hormuz, pointing to progress toward a broader agreement with Iran, though he did not provide specifics.
There was no immediate response from Tehran, where it was still early Wednesday morning. However, Trump added that the US Navy would continue maintaining its blockade of Iranian ports. The Strait of Hormuz—responsible for transporting roughly one-fifth of the world’s oil and natural gas—has remained largely disrupted since the US-Israeli conflict with Iran began on February 28.
"We have mutually agreed that, while the Blockade will remain in full force and effect, Project Freedom ... will be paused for a short period of time to see whether or not the Agreement can be finalized and signed," Trump wrote on social media.
The announcement came just hours after US Secretary of State Marco Rubio briefed reporters on the initiative, first revealed on Sunday, to escort stranded tankers through the strait.
On Monday, the US military said it had destroyed several Iranian small boats, along with cruise missiles and drones, while safely guiding two vessels out of the Gulf.
The disruption in the Strait of Hormuz has also tightened global inventories, as refineries scramble to compensate for supply shortages.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
Vaamanaa covers business and stock market news. Started in 2020, she has been producing news on digital platforms for over 4.5 years now. She writes on markets, commodities, IPOs, and industry. She has worked for news channels like Jagran New Media and Business Insider India. You can reach out to her at vaamanaa.sethi@htdigital.in.
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