Crude oil prices on MCX crash 9% to below ₹10,000/bbl on US-Iran war ceasefire. What's near-term outlook?

US-Iran war ceasefire: Crude oil prices on Multi Commodity Exchange (MCX) crashed as much as 9% to ₹9,709 per barrel on Wednesday, tracking a decline in global oil prices, after the US and Iran reached a two-week ceasefire deal, which is expected to pause the American-Israeli military offensive in return for Iran reopening the Strait of Hormuz.

On the international front, Brent crude tumbled by as much as 16% before stabilising near $95 per barrel, while West Texas Intermediate recorded its steepest fall in nearly six years, trading around $96.

What's behind crude oil price fall today?

US President Donald Trump said that the ceasefire is subject to Iran reopening the Strait of Hormuz, which would pave the way for the agreement to be fully completed.

The announcement came roughly 90 minutes before his earlier ultimatum for Iran to reopen the strait or face heavy military strikes. The period leading up to it was marked by heightened tensions and increasingly aggressive rhetoric from the US president toward Iran, including a warning that “a whole civilisation will die tonight.”

Iran has agreed to a ceasefire proposal put forward by Pakistan, noting that ships will be allowed safe passage through the strait for two weeks in coordination with its armed forces, Foreign Minister Abbas Araghchi said. Israel has also consented to the temporary halt in hostilities, according to a White House official.

As part of the plan, Iran and Oman may be permitted to levy transit fees on vessels passing through the Strait of Hormuz, the Associated Press reported, citing a regional official. Delegations from the US and Iran have been invited to Islamabad on Friday for further talks aimed at reaching a final agreement to resolve all disputes, Pakistan Prime Minister Shehbaz Sharif said on X.

The near shutdown of the crucial waterway — which typically handles about 20% of global oil and LNG flows — has unsettled energy markets, with WTI crude still up over 40% since the conflict began in late February.

Following signs of de-escalation, trading activity spiked, with approximately 240,000 Brent contracts traded in the first hour alone, compared with just a few thousand lots in a normal session, according to a Bloomberg report.

Crude oil prices near-term outlook

Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities, believes that if the ceasefire holds over the next two weeks and evolves into a more concrete pause, oil could extend its downside with Brent drifting towards the $85 zone, while key near-term levels to watch remain support around $90 for both Brent and WTI and resistance near $100.

“A last-minute ceasefire triggered a sharp collapse in oil prices, with WTI plunging nearly $26 from $117 to $91, as markets quickly priced in the reopening of the Strait of Hormuz and a two-stage plan involving an immediate truce followed by 15–20 days of negotiations; the resulting drop in energy prices softened inflation expectations, weakened the US Dollar, and in turn sparked a strong rally in metals—especially bullion—while broader financial assets moved higher, reflecting a classic unwind of geopolitical risk premium led by oil, transmitted through the dollar, and amplified across global markets,” Banerjee said.

Meanwhile, Ponmudi R, CEO of Enrich Money, said that crude oil continues to remain the key driver of the entire market.

Commenting on the technical outlook, Ponmudi R added, “On the downside, ₹10,650– ₹10,600 acts as immediate support. Any dip toward these levels is likely to attract buying interest. The overall chart pattern remains bullish, supported by ongoing geopolitical tensions.”

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