IGI Logo

Below the Perspective on Crude Oil by Ashish Rajodiya, Head - Commodities, PL Capital

Crude oil is extending its retreat for a sixth straight session, with WTI down about 1.5% to near $89.12 a barrel and Brent off roughly 1% to $98.29 — prices that have now unwound a large chunk of the panic premium built up during the worst of the Hormuz standoff. The latest leg lower follows a senior Iranian official reportedly submitting a diplomatic proposal to Washington through mediators, offering to reopen the Strait of Hormuz within seven days if the US eases military pressure and lifts its blockade on Iranian ports. Saudi Arabia is adding to the relief on the supply side: Aramco has restarted its East-West pipeline, albeit at reduced capacity, with Red Sea exports resuming from Yanbu the same day, and crude shipments through Hormuz over September 13-18 averaged 2.9 million barrels a day, up sharply from roughly 700,000 barrels in August. The recovery is still fragile, though — only two commercial vessels transited the Strait on Monday, against around 125 a day before the conflict, underlining how far actual traffic still has to travel to match the improving headlines. With Brent still near $100 and diesel prices squeezing consumers even as the Fed holds a hawkish line after last week's hike, the next real test is whether Iran's seven-day reopening offer is accepted or stalls — a genuine deal would extend this slide meaningfully, while a breakdown in talks or a fresh incident at a chokepoint would snap the premium straight back.

Above views are of the author and not of the website kindly read disclaimer