Crude Oil Price On May 7: Brent Crude Above $100 - Will There Be A Petrol Price Hike In India?

Global oil prices retreated sharply and equity markets rallied after reports suggested that the United States and Iran could be edging closer to a diplomatic agreement aimed at ending the ongoing conflict in the Middle East.

The sudden shift in market sentiment came after Axios reported that Washington believes a draft one-page framework could pave the way for a ceasefire and eventually lead to detailed negotiations over Iran's nuclear programme. The development sparked optimism across global markets, easing fears of prolonged supply disruptions in one of the world's most critical energy-producing regions.

Crude Oil Price Today

Brent crude, the international oil benchmark, briefly dropped to nearly $97 per barrel before recovering slightly to trade above $102. Just a day earlier, Brent had surged beyond $108 amid escalating tensions. US West Texas Intermediate (WTI) crude was trading at $95.87 per barrel, up marginally by 0.83%, while Murban crude fell sharply by more than 7%.

The broader energy market also reflected mixed sentiment. Natural gas prices softened slightly, while heating oil and Dutch TTF natural gas futures declined. However, several regional crude benchmarks, including the Indian Basket and Western Canadian Select, remained under pressure due to lingering uncertainty surrounding global supply routes.

The market reaction highlights how sensitive oil prices remain to developments in the Middle East conflict, particularly around the Strait of Hormuz - a narrow but strategically crucial shipping route through which nearly one-fifth of global oil and gas supplies normally pass.

Source: oilprice.com

Since the conflict intensified following US-Israeli strikes on Iran in late February, Tehran has repeatedly threatened to target vessels passing through the strait. The disruption has significantly affected global energy transportation, pushing crude prices sharply higher over the past several weeks.

Although hopes of a breakthrough lifted investor confidence, uncertainty continues to dominate the outlook. Shortly after the Axios report, an Iranian Foreign Ministry spokesperson stated that the US proposal was still under consideration and no final decision had been reached.

US President Donald Trump also appeared to strike a cautious tone. Posting on Truth Social, Trump said any agreement with Iran remained "a big assumption" and warned that failure to secure a deal could lead to military strikes "at a much higher level and intensity" than those seen during Operation Epic Fury.

Despite the recent correction, oil prices remain substantially above pre-conflict levels. Before tensions escalated, Brent crude was hovering around $70 per barrel. The sustained rally has already raised concerns about inflationary pressures and fuel affordability across major importing nations.

For India, the world's third-largest crude oil importer, the temporary easing in prices offers limited relief. State-run oil marketing companies (OMCs) have absorbed much of the recent surge in input costs while keeping retail petrol and diesel prices largely unchanged since 2022.

However, signs are emerging that the government may soon permit fuel price revisions. Industry sources indicate that discussions are underway to allow OMCs to pass on rising crude costs to consumers after years of price stability.

If approved, petrol and diesel prices in India could increase by ₹4 to ₹5 per litre, while domestic LPG cylinder prices may rise by ₹40 to ₹50. Such a move would mark the first major upward revision in fuel prices in nearly four years.

Analysts say the coming weeks will be crucial for global energy markets. Any confirmation of a ceasefire or diplomatic breakthrough could trigger further declines in crude prices. At the same time, renewed hostilities or disruptions in the Strait of Hormuz could once again send oil soaring, keeping governments, businesses, and consumers worldwide on edge.