The turnaround in Brent prices from Monday’s intraday high of $119.50 per barrel marked the steepest fall from an intraday peak to the closing price for the commodity. Crude prices extended losses on Tuesday morning, falling another 10% to trade below $90 per barrel.
On Monday, oil had surged past $100 a barrel, with Brent touching a session high of $119.50 and WTI reaching $119.48, the highest levels since mid-2022. The rally was driven by concerns over potential supply disruptions after Saudi Arabia and other producers cut output amid the expanding U.S.-Israeli conflict with Iran.
Prices later retreated after Russian President Vladimir Putin spoke with Trump and conveyed proposals aimed at achieving a quick resolution to the Iran conflict, according to a Kremlin aide. The development helped ease fears that the war could significantly disrupt global oil supplies for a prolonged period.
Speaking to CBS News on Monday, Trump said he believed the war against Iran was “very complete” and added that the U.S. was “very far ahead” of the four- to five-week timeline he had earlier estimated.
Live Events
Falling crude prices typically weigh on upstream oil and gas companies such as ONGC and Oil India, as lower oil prices directly reduce the revenue they earn per barrel and may put pressure on profit margins.
Before Trump’s latest remarks, Qatar’s energy minister had warned that Gulf energy producers could shut down exports within weeks. In an interview with the Financial Times published last Friday, he said such a scenario could push oil prices to $150 per barrel.Domestic brokerage JM Financial said that every $1 increase in crude prices raises India’s annual import bill by about $2 billion. Prolonged tensions could lift logistics and marine insurance costs, disrupt shipping routes across the Gulf, and widen pressure on the country’s trade balance.
The brokerage also noted that the Indian rupee could face near-term depreciation pressure, prompting potential intervention by the RBI through foreign exchange reserves. Higher crude prices could add to inflation risks, push bond yields higher, and compress equity valuation multiples.
Sensex, Nifty today: Catch all the LIVE stock market action here
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)