Crude prices fall below pre-Iran-Israel tensions: What’s next for oil?

Oil prices have returned to levels seen before the Iran-Israel conflict, falling 16 per cent from the height of Middle East tensions, and 10 per cent since June 13, the day hostilities escalated between the two countries following Israeli strikes on Iranian targets.

Analysts said both countries now appear to be maintaining an uneasy truce after initial violations by each side. They noted that crude oil prices eased further on US President Donald Trump’s comments suggesting China could resume oil imports from Iran. However, a White House official clarified that US sanctions on Iran remain in force.

Brent crude had hit a high of $79.40 per barrel on June 23 amid fears that Iran might retaliate by blocking the Strait of Hormuz — a critical chokepoint through which nearly 20 per cent of global oil supply flows. But oil prices have since retreated following the ceasefire.

On Thursday, Brent futures for September delivery were trading 0.50 per cent higher at $66.76 per barrel, down 15.91 per cent from the June 23 level. This followed a 0.39 per cent gain in the previous session, reflecting signs of stabilisation in the oil market.

According to the Petroleum Planning & Analysis Cell (PPAC), the Indian crude oil basket price stood $68.83 per barrel on June 24 (latest data), compared with an average of $70.90 for June, $64.04 in May, and $67.73 for April.

"Crude oil prices recovered from their lows after a sharp correction, as markets stabilised ahead of next week’s US–Iran talks aimed at de-escalating tensions and addressing Tehran’s nuclear programme," said Rahul Kalantri, Vice President – Commodities at Mehta Equities.

In the US, crude inventories fell by 5.8 million barrels—reaching the lowest seasonal level in 11 years—indicating firm demand. All eyes are now on the OPEC+ meeting scheduled for July 6, where cartel members, including Russia, may consider raising supply to meet market requirements.

“We expect crude oil prices to remain volatile in today’s session,” Kalantri added. “Crude has support at $64.20–63.50 and resistance at $66–67. In rupee terms, support lies at Rs 5,570–5,500 and resistance at Rs 5,710–5,820,” Kalantri said.