Global oil prices fell over 1% on Wednesday as Iran-US peace talks continued and a fragile ceasefire largely held despite fresh US strikes in southern Iran.
Around 8:30 AM, the July contract of Brent on the Intercontinental Exchange was trading at $98.30 a barrel, down 1.29% from its previous close, while the July contract of West Texas Intermediate on the NYMEX fell 1.67% to $92.32 a barrel.
The Iranian foreign ministry denounced the US attack — aimed at missile launchers and efforts to lay fresh mines in the Strait of Hormuz — as “an act of bad faith” and “a definitive violation of the ceasefire”, adding that it would not leave the aggression unanswered.
However, Tehran did not withdraw from the talks, which are continuing under the joint mediation of Pakistan and Qatar.
Fresh strikes
On Monday, US forces conducted strikes in southern Iran, which Washington described as “self-defence” actions targeting boats allegedly attempting to lay mines and missile launch sites.
The strikes came even as Iran’s top negotiator and foreign minister were in Doha for discussions with Qatar’s prime minister on a potential agreement with the US to end the war.
Although Iran sharply criticized the attacks, it has so far remained engaged in negotiations.
Doha talks
The Guardian reported that Iran’s parliamentary speaker and chief negotiator, Mohammad Bagher Ghalibaf, held talks in Doha on Tuesday regarding the release of more than $12 billion worth of frozen Iranian assets.
He is also reportedly seeking sanctions relief for Iran’s oil and petrochemical exports during the 60-day period set aside for negotiations over fresh constraints on Iran’s nuclear programme, the report said.
Despite the ongoing negotiations, the absence of a definitive breakthrough has kept traders cautious.
India impact
Amid elevated crude prices, Indian oil marketing companies have raised fuel prices by around ₹7.5 per litre since 15 May.
On Monday, 25 May, oil marketing companies increased petrol and diesel prices by more than ₹2 per litre.
In the national capital, petrol prices were raised by ₹2.61 per litre to ₹102.12, while diesel prices rose by ₹2.71 to ₹95.20 per litre.
Sujata Sharma, joint secretary, ministry of petroleum and natural gas, on Monday said that daily losses of India’s state-run oil marketing companies on the sale of petrol, diesel and liquefied petroleum gas (LPG) have narrowed to about ₹600 crore from nearly ₹1,000 crore before retail fuel prices were first raised on 15 May.
