Oil Prices Falls Close To Pre-War Levels As Strait Of Hormuz Reopens; IndiGo, BPCL, HPCL, IOC In Focus

Oil prices extended their decline on Thursday, with Brent crude approaching levels last seen before the US-Israeli war with Iran began on 28 February, as stranded tankers moved through the Strait of Hormuz and supply concerns rapidly unwound.

Brent crude futures for August delivery fell 40 cents, or 1.23%, to $72.27 a barrel at 10:00 AM. West Texas Intermediate dropped 1.38%, to $69.40 a barrel.

A market structure shift added to the bearish signal. August Brent traded below the September contract, which was priced at $73.59. This created a contango structure, a market setup that typically suggests adequate near-term supply. During the conflict, oil markets had reflected a scarcity premium as traders worried about supply disruptions.

Early Trade Moves

Softer crude prices initially lifted aviation and downstream energy stocks, although most of the gains faded as the session progressed:

• InterGlobe Aviation (IndiGo parent): Rose as much as 3.3% to ₹5,379.10 in early trade on expectations of lower aviation turbine fuel costs. The stock later extended its gains and was trading at ₹5,444.10, up 4.55%, at 11:40 AM.

• Bharat Petroleum Corporation: Climbed 1% to ₹318.75 at the open but gave up its gains during the session. By 11:40 AM, the stock was at ₹314.60, down 0.35%.

• Hindustan Petroleum Corporation: Advanced 0.9% to ₹416.85 in early trade before easing. It was trading at ₹414.05, up 0.28%, at 11:40 AM.

• Indian Oil Corporation: Edged up 0.1% to ₹146.47 shortly after the open. The stock later slipped into the red and was trading at ₹145.53, down 0.53%, at 11:40 AM.

How Quickly Things Have Changed

An initial accord to end the war, struck last week, set up a 60-day negotiation period to address harder issues including Iran's nuclear programme. But the physical market has moved faster than the diplomatic timeline.

US Energy Secretary Chris Wright told a forum on Wednesday that flows through the Strait of Hormuz were close to pre-war levels, with at least 20 million barrels having exited the strait in the preceding 24 hours.

He added that a full return to normalcy would take a few more weeks because the strait needs to be demined, but said oil would continue to flow even if the broader deal did not hold and that Iran would not be able to close the waterway again.

The Logistics Of Reopening

Oman opened temporary routes on Wednesday to ease tanker departures from the strait, with the International Maritime Organization and Omani authorities coordinating vessel movements. Qatar's prime minister travelled to Oman for talks on initiating negotiations over the strait's future management involving Iran, Iraq and Gulf states.

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Record-Low US Crude Stocks Couldn’t Stop Oil’s Slide

US total crude stocks fell to their lowest level since 1984 last week, according to the Energy Information Administration, driven by strong refining demand and government releases from the strategic petroleum reserve.

Under normal circumstances, a drawdown of that scale would push prices higher. Markets shrugged it off entirely, with traders focused on the Strait of Hormuz reopening rather than the domestic inventory picture.

Sources:

Reuters

Business Standard

Moneycontrol