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US-Iran war: Oil prices steadied in early trading on Thursday, 7 May, recovering from steep losses in the previous session as investors assessed the likelihood of a successful peace agreement between the US and Iran.
Brent crude futures rose 88 cents, or 0.9%, to $102.15 per barrel by 0032 GMT, while US West Texas Intermediate crude advanced $1.12, or 1.2%, to $96.20 a barrel.
Both benchmark contracts had tumbled over 7% on Wednesday, touching two-week lows amid optimism surrounding a potential resolution to the Middle East conflict.
Back home, crude oil prices on the Multi Commodity Exchange (MCX) also witnessed a similar upward movement, tracking global prices. MCX crude oil prices rose to ₹9,040 per barrel.
US President Donald Trump said it was “too early” for direct talks with Iran, while a senior Iranian lawmaker described the US proposal as more of a “wish list” than a practical solution.
Iran stated that it was examining a US-backed peace proposal which, according to sources, aims to formally end the conflict but leaves unresolved Washington’s key demands — including Tehran halting its nuclear programme and reopening the Strait of Hormuz.
“The US will stop its military operations and remove its blockade if Iran agrees to the terms already discussed — though that may be a big assumption,” Trump wrote on social media on Wednesday, without elaborating further. “If they refuse, the bombing will begin.”
According to Bloomberg, Trump is facing mounting pressure to end the conflict as rising fuel prices in the US intensify concerns among voters over the cost of living.
At the same time, Trump and Chinese President Xi Jinping are scheduled to meet in Beijing on May 14–15. Earlier this week, China’s top diplomat urged the quick reopening of the Strait of Hormuz during discussions with his Iranian counterpart.
According to Norbert Rücker, Head of Economics and Next Generation Research at Julius Baer, the oil market has moved past the initial shock reaction and has settled in a regime of deficit absorption by inventory draws. There is breathing room to deal with the supply shock beyond summer.
“Our views are unchanged; the current crisis should follow the historic pattern of a short-lived but intense price shock. Looking much further ahead, some years from now, the Strait of Hormuz very likely will have lost some of its strategic importance and economic threat, given the lasting shifts that already occurred in response to the conflict,” Rücker said.
Meanwhile, Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities, said that Brent is expected to remain locked in a headline-driven $100–$118 range, well below the March peak of $126 but with the structural risk premium firmly intact.
“With most of OPEC's spare capacity trapped behind Hormuz, and global stocks drawing down toward 98 days of cover by end-May, this is no longer a tactical risk premium in West Asian crude — it is structural, and it is here to stay until the political logjam breaks,” Banerjee said.
On the technical outlook, Ponmudi R, CEO of Enrich Money, said that asustained move above ₹9,650– ₹9,700 could reverse the near-term bearish momentum and push prices toward ₹9,800– ₹9,900.
“On the downside, immediate support lies at ₹9,400; a break below this level may extend the decline toward ₹9,200– ₹9,000. The near-term structure remains cautiously bearish, with direction dependent on ongoing developments in the Strait of Hormuz,” Ponmudi said.
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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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