Crude oil futures traded sharply lower on Wednesday morning, declining nearly 1% after reports of improved oil tanker traffic through the Strait of Hormuz fuelled expectations of easing supply disruptions, according to The Hindu BusinessLine.
Price Movement
At 10.01 am on Wednesday, September Brent oil futures on ICE were at $76.29 per barrel, down 0.66%, while August WTI crude oil futures on NYMEX traded at $72.67 per barrel, down 0.74%. On India's Multi Commodity Exchange (MCX), July crude oil futures were at ₹6,926 per barrel, down 0.55% from the previous close of ₹6,964, and August futures traded at ₹6,910, down 0.43% from ₹6,940.
| Contract | Exchange | Price | Change (%) | Previous Close |
|---|---|---|---|---|
| Sept Brent | ICE | $76.29 | -0.66% | -- |
| Aug WTI | NYMEX | $72.67 | -0.74% | -- |
| July MCX Crude | MCX | ₹6,926 | -0.55% | ₹6,964 |
| Aug MCX Crude | MCX | ₹6,910 | -0.43% | ₹6,940 |
Supply Drivers: Hormuz Traffic Improvement
According to ING Think strategists Warren Patterson, Head of Commodities Strategy, and Ewa Manthey, Commodities Strategist, in their Commodities Feed, oil prices continued to grind lower, with ICE Brent settling a little over 1% lower on Tuesday. Positive signals from the Persian Gulf are fuelling optimism about oil flows through the Strait of Hormuz.
The strategists noted that vessel crossings increased in recent days, although they remain well below pre-war levels. Estimates suggest that roughly 6–7 million barrels per day of oil moved through the strait recently, which is still far below the pre-war average of around 20 million barrels per day. However, with pipeline diversions for Saudi Arabia and the United Arab Emirates, ING Think estimated that only 14 million barrels per day needs to flow through the strait for Persian Gulf oil supply to return to pre-war levels.
"We continue to believe that the oil sell-off is overdone, with the market still tightening. Clearly, price movements suggest the market expects a fairly rapid recovery in Persian Gulf oil supplies," Patterson and Manthey said.
Geopolitical Developments: Trump-Iran Agreement
In a significant geopolitical development, US President Donald Trump posted on Truth Social on Tuesday that Iran has "fully and completely" agreed to the highest level nuclear inspections long into the future. "This will insure 'Nuclear Honesty.' If they did not agree to this, there would be no further negotiations!" Trump wrote. He added: "Based on this and other major concessions being made by Iran, I have agreed to allow the Hormuz Strait to remain OPEN, with no further Naval Blockade."
Other Commodities
On the MCX, June copper futures traded at ₹1,263.90 per kg during the initial hour, down 1.40% from the previous close of ₹1,281.80. On the National Commodities and Derivatives Exchange (NCDEX), August dhaniya (coriander) futures were at ₹14,708 per quintal, down 0.58% from ₹14,794, and July jeera (cumin) futures traded at ₹20,620 per quintal, down 0.58% from ₹20,740.
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