3 weeks ago
Fuel prices steady as crude dips on US-Iran deal optimism
Petrol and diesel are fuels that cars and bikes need, and their prices matter to many people.
On this day, petrol and diesel prices stayed the same in many Indian cities.
That is because the last big price change happened on 25 May.
Fuel prices around the world depend on something called crude oil, which is the natural liquid fuel is made from.
The price of crude oil went down a little on this day.
It went down because people think the US and Iran might soon make a deal.
The deal is about a narrow waterway called the Strait of Hormuz, through which many oil ships travel.
When the waterway was closed, oil prices moved a lot.
If a deal is reached, oil could become cheaper.
Leaders say an agreement is close, but it still needs final approval from Iran's top leader.
Petrol and diesel prices stayed unchanged across major Indian cities on 6 August, still aligned with the last major revision on 25 May.
Brent crude traded near $79 a barrel, while WTI fell 0.4% to below $75 after losing 11% in the first three sessions of the week.
Crude declined on optimism that a US-Iran accord to restore traffic through the Strait of Hormuz is near, with Iran saying it is in the 'final stage' of drafting an agreement with Oman.
US President Donald Trump said Washington is talking to Tehran and a deal to reopen the critical waterway could be announced this week.
The Society of Indian Automobile Manufacturers (SIAM) withdrew a letter to the Ministry of Petroleum and Natural Gas that had flagged E20 fuel contamination concerns.
- Who
- US President Donald Trump, Iran's Foreign Ministry spokesperson Esmail Baghaei, Iran's Supreme Leader Ayatollah Mojtaba Khamenei, officials from Iran and Oman, and Indian fuel consumers and industry body SIAM.
- What
- Petrol and diesel prices stayed steady in Indian cities while global crude oil prices declined on optimism over a US-Iran deal to reopen the Strait of Hormuz.
- Where
- Indian cities including New Delhi, Bengaluru, Bhubaneswar, Chandigarh, Jaipur and Patna; the Strait of Hormuz; talks between Washington and Tehran; a Trump rally in Las Vegas.
- When
- 6 August, with the last major domestic price revision on 25 May and the ongoing war having begun on 28 February.
- Why
- Crude prices fell because markets expect an accord to restore traffic through the Strait of Hormuz, while Indian retail fuel rates remained unchanged since the 25 May revision despite Brent volatility.
Deal optimists
Cautious skeptics
Prospects of the US-Iran deal on the Strait of Hormuz
Deal optimists
Washington is talking to Tehran, negotiators have finalized a draft agreement with Oman, and President Trump says a deal to reopen the waterway could be announced this week.
Cautious skeptics
The draft still awaits final approval from Iran's Supreme Leader Ayatollah Mojtaba Khamenei, and Iran said a joint statement will only be issued 'if certain parties do not obstruct this process,' leaving the outcome uncertain.
Direction of oil prices
Deal optimists
If a deal is reached, oil prices could head toward $70 per barrel, as the market evaluates the potential of an agreement with Iran.
Cautious skeptics
Oil has already lost 11% in the first three sessions of the week, and the five-month closure of the strait has caused massive fluctuation in crude prices, so volatility may persist.
Key facts
- Petrol price in New Delhi
- ₹102.12 per litre
- Diesel price in New Delhi
- ₹95.20 per litre
- Brent crude price
- Near $79 per barrel
- WTI price
- Below $75 per barrel (down 0.4%)
- Last major domestic price revision
- 25 May
- Strait of Hormuz oil share
- 20% of the world's oil and natural gas once transited through it
- Gold price
- Around $4,270 per ounce, biggest gain since February
- Potential oil price if deal is reached
- Could head toward $70 per barrel (Rob Thummel, Tortoise Capital)
Quotes
Esmail Baghaei
Spokesperson for Iran’s Foreign Ministry
“"final stage" of drafting an agreement”
livemint.com
“"see what happens"”
livemint.com
Rob Thummel
Senior portfolio manager at Tortoise Capital
“"US oil prices have already fallen below $80 per barrel as the global oil market evaluates the potential of a deal with Iran, and if a deal is reached, then it is possible for oil to head toward $70 per barrel."”
livemint.com
Sources
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