New Delhi, April 8 Crude oil prices plunged sharply on Wednesday, falling by 6 per cent to hit their lower circuit level in futures trading, as global benchmarks weakened following the announcement of a two-week ceasefire between the US and Iran.
On the Multi Commodity Exchange (MCX), futures for April delivery of crude oil declined by Rs 640, or 6 per cent, to Rs 10,029 per barrel – its lower circuit limit.
Similarly, the May contract fell by Rs 565, or 6 per cent, to Rs 8,860 per barrel, also hitting its lower circuit limit due to aggressive selling as easing tensions reduced fears of supply disruptions.
Globally, oil prices retreated after the ceasefire announcement between the US and Iran, which is expected to restore supply flows through the Strait of Hormuz – a key transit route for nearly one-fifth of global oil shipments.
West Texas Intermediate (WTI) crude futures for May delivery tumbled by USD 17.11, or 15.15 per cent, to USD 95.84 per barrel, while Brent oil for the June contract plunged by USD 14.52, or 13.29 per cent, to USD 94.75 per barrel in New York.
Analysts said crude prices cooled after geopolitical risk premiums unwound following the easing of tensions in West Asia.
US President Donald Trump said he would suspend planned military action against Iran after Washington and Tehran agreed to a two-week ceasefire that includes the reopening of the Strait of Hormuz.
Meanwhile, Iranian Foreign Minister Abbas Araghchi indicated that passage through the Strait of Hormuz would be permitted during the period, easing concerns over supply disruptions.