Crude Oil Slips As U.S.-Iran Talks Raise Hopes Of Easing Supply Risks

Crude oil prices declined on 4 June after developments surrounding U.S.-Iran negotiations improved market sentiment and reduced fears of prolonged disruption to global energy supplies.

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Brent crude futures fell 67 cents, or 0.69%, to $97.14 per barrel, while U.S. West Texas Intermediate (WTI) crude dropped 62 cents, or 0.65%, to $95.40 per barrel. The decline came after both benchmarks had gained about 2% in the previous session amid heightened geopolitical tensions in the Middle East.

In India, crude oil futures on the Multi Commodity Exchange (MCX) mirrored the global trend. MCX crude oil futures fell 1.26% to ₹9,124 per barrel during trading.

Diplomatic Developments Weigh On Oil

The latest decline followed reports of a ceasefire agreement between Israel and Lebanon, which strengthened expectations that broader regional tensions could ease.

In the U.S., the House of Representatives approved a resolution seeking to restrict President Donald Trump's authority to continue military action against Iran. The proposal still requires Senate approval and would need sufficient support to override a potential presidential veto.

President Trump said talks with Iran could move forward as soon as this weekend, Bloomberg reported. Iranian Foreign Minister Abbas Araqchi also said that the communication between Tehran and Washington is still active and both sides are reviewing draft proposals exchanged during the discussions.

Trump also said the Strait of Hormuz could be opened “immediately” after a formal agreement is reached with Iran to stop hostilities. The waterway remains one of the world’s most important for shipments of crude oil.

Market Still Sensitive To Supply Risks

Crude oil prices remained reflective of the uncertainty surrounding developments in the Gulf region, despite Thursday’s decline.

Recent gains were driven by fears of Iranian military action and U.S. strikes near the Strait of Hormuz, raising concerns about the disruption of crude supplies globally. Any escalation affecting energy infrastructure or shipping routes could quickly alter market direction.

Near-Term Outlook For Crude

Speaking to Mint, Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, said Brent crude is likely to remain volatile within a $92-$100 per barrel range in the near term.

He said a formal agreement between Washington and Tehran could lower prices by $5-$6 per barrel, while any attack on Gulf energy assets could push Brent back above $100. For MCX crude oil futures, he expects a broad trading range of ₹8,600-₹9,500 per barrel.

On the technical front, Ponmudi R, CEO of Enrich Money, told Mint that MCX crude oil has found support above ₹9,000 after rebounding from the ascending trendline near ₹8,200. He identified ₹9,150-₹9,200 as the immediate resistance zone, while ₹8,860-₹8,800 remains key support.

As geopolitical developments continue to influence sentiment, crude oil markets are likely to remain very sensitive to any developments in diplomatic negotiations or changes in regional security conditions.