Crude oil futures traded sharply lower on Thursday morning, with August Brent oil futures at $77.94 per barrel, down 2.02%, and July WTI crude at $75 per barrel, down 2.33%, according to market data at 10.03 am. On the Multi Commodity Exchange (MCX), June crude oil futures fell to ₹7,078, down 1.86% from the previous close of ₹7,212, while July futures traded at ₹7,034, down 1.73% from ₹7,158. The decline followed reports that the United States and Iran had digitally signed an interim peace agreement on Wednesday to end the war in West Asia.
Supply-Side Impact
According to reports, the interim deal would help reopen the Strait of Hormuz and waive US sanctions on oil produced in Iran. These moves are expected to ease the global oil supply situation. The International Energy Agency (IEA) in its Oil Market Report for June stated that an interim agreement could pave the way for a reopening of the Strait of Hormuz and a lifting of the US blockade on Iranian oil traffic. Prices had already retreated from recent highs as market tensions eased on a surge in Gulf exports at the start of June, an acceleration in IEA government stock releases, and weaker demand. The report added that if the deal holds, exports and production from the Gulf should see a gradual recovery, notably because Iranian oil exports can fully resume once the blockade is lifted.
The IEA report provided contrasting supply projections: global oil supply is expected to fall by 3.9 million barrels per day on average in 2026 to 102.4 million barrels per day, yet also noted that oil supplies look set to surge by around 8 million barrels per day to 110 million barrels per day. This apparent discrepancy may reflect different timeframes or scenarios, but it underscores the uncertainty around the market balance.
Demand and Inventory Dynamics
The IEA projects global oil demand to rise by a relatively modest 2 million barrels per day to 105.3 million barrels per day, while supply could surge, potentially providing a welcome respite and an opportunity to replenish depleted inventories or build new strategic reserves, as countries review their energy strategies.
Meanwhile, the US Energy Information Administration (EIA) reported a decline in crude oil inventories for the week ending June 12. US commercial crude oil inventories decreased by 8.3 million barrels from the previous week, standing at 418.2 million barrels—about 6% below the five-year average for this time of year. Other product inventories showed mixed changes:
| Product | Weekly Change | Status vs 5-Year Average |
|---|---|---|
| Total motor gasoline | -0.9 million barrels | 6% below |
| Distillate fuel | +1 million barrels | 13% below |
Total products supplied over the last four weeks averaged 20.6 million barrels per day, up 3.3% from the same period last year. Motor gasoline product supplied averaged 8.9 million barrels per day, down 1.1% year on year, while distillate fuel product supplied averaged 3.7 million barrels per day, up 5.5%. Jet fuel product supplied was down 0.2% compared with the same four-week period last year.
Other Commodities
On the MCX, June copper futures traded at ₹1,324.30, down 1.04% from the previous close of ₹1,338.15. On the National Commodities and Derivatives Exchange (NCDEX), June guarseed contracts rose 1.43% to ₹6,082, and June cottonseed oilcake futures gained 0.35% to ₹3,710.
The market will continue to watch for any official confirmation of the US-Iran deal and further data releases, including weekly EIA reports and IEA updates, for directional cues on oil prices.
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