New Delhi, March 23 Crude oil prices reversed early gains on Monday, hitting the lower circuit after declining by 9 per cent to Rs 8,431 per barrel in futures trading, following US President Donald Trump's announcement of a temporary halt to military strikes on Iran's energy infrastructure.
On the Multi Commodity Exchange, crude oil for April delivery initially opened higher, gaining Rs 362, or 4 per cent, to reach an intraday high of Rs 9,620 per barrel.
However, prices later reversed sharply, plummeting Rs 827, or 9 per cent, to Rs 8,431 per barrel, which was its lower circuit limit.
Analysts said the sharp reversal came after easing geopolitical tensions following the US decision to pause potential strikes on Iranian energy facilities.
Crude prices also fell in overseas markets. West Texas Intermediate (WTI) futures for the May contract declined by USD 7.24, or 7.37 per cent, to USD 90.99 per barrel, while Brent for the same month delivery dropped by USD 6.70, or 6.30 per cent, to USD 99.71 per barrel in New York.
In a post on Truth Social, Trump said he had "instructed the Department of Defense to postpone all military strikes against Iranian power plants and energy infrastructure for a five-day period".
He added that this was "subject to the 'success' of the ongoing 'meetings and discussions'".
He further stated that "over the last two days, Washington and Tehran have had very good and productive conversations regarding a complete and total resolution of our hostilities in the Middle East".
On Saturday, Trump had warned Iran to reopen the Strait of Hormuz within 48 hours, a key global oil transit hub, or face military action on its key energy facilities, including power plants.
Tehran said it would "irreversibly destroy" essential infrastructure across West Asia, including vital water systems, if the US followed through on Trump's threat.
Iran also said it would target power plants in all areas that supply electricity to American bases, "as well as the economic, industrial and energy infrastructures in which Americans have shares".
According to analysts, the temporary de-escalation has eased supply disruption fears, triggering profit-booking and a sharp correction in oil prices after recent gains.
