New Delhi, Apr 8 (PTI) Crude oil prices nosedived by 18 per cent to Rs 8,775 per barrel in futures trade on Wednesday, after the US and Iran agreed to a two-week ceasefire and the reopening of Strait of Hormuz, triggering heavy selling by traders as the geopolitical risk premium evaporated.
Snapping a three-day rally, crude oil futures for April delivery opened lower by 6 per cent to Rs 10,029 per barrel, its lower circuit limit, on the Multi Commodity Exchange (MCX).
Later, the contract extended losses, tumbling by Rs 1,894, or 17.75 per cent, to Rs 8,775 per barrel from previous close of Rs 10,669 per barrel. On Tuesday, it gained nearly 4 per cent to hit a record high of Rs 10,990 per barrel.
Similarly, crude oil for May delivery also slumped by Rs 1,413, or 15 per cent, to Rs 8,012 per barrel, amid aggressive unwinding of long positions by investors as easing tensions in West Asia reduced fears of supply disruptions.
The contract had climbed nearly 3 per cent to touch a lifetime high of Rs 9,560 per barrel on Tuesday before settling at Rs 9,425 per barrel on the MCX.
The retreat came after a blistering rally in crude oil driven by escalating tensions in West Asia.
From its record highs, the April contract rallied 80 per cent from Rs 6,106 per barrel recorded on February 27, 2026. The May delivery also jumped 56 per cent from Rs 6,128 per barrel during the same period.
Global crude oil markets mirrored the selloff, with prices slipping below the USD 100 a barrel in Asian trading hours on Wednesday following the ceasefire announcement, which is expected to restore supply flows through the Strait of Hormuz, a critical transit route for nearly one-fifth of energy shipments.
West Texas Intermediate (WTI) crude futures for May delivery plummeted USD 16.28, or 14.41 per cent, to USD 96.67 per barrel. In intraday trade, it tanked by USD 21.9, or 19.4 per cent, to hit a low of USD 91.05 per barrel on the NYMEX.
“WTI crude futures plunged more than 15 per cent to below USD 95 per barrel on Wednesday after US President Donald Trump delayed his threat to attack Iranian civilian infrastructure by two-weeks in what he described as a ‘double-sided ceasefire,’ contingent on Iran reopening the Strait of Hormuz,” Jigar Trivedi, Senior Research Analyst at IndusInd Securities, said.
Brent oil futures for the June contract also dropped sharply, falling USD 14.31, or 13.10 per cent, to USD 94.96 per barrel. In the intraday session, it plunged USD 19.26, or 17.62 per cent, to hit a low of USD 90.01 per barrel.
Trump also said Washington had received a 10-point proposal from Iran, that he described as a “workable basis for negotiations.” Meanwhile, Tehran agreed to reopen the Strait of Hormuz for two weeks provided all hostilities halt, with transit coordinated through Iran’s Armed Forces.
According to reports, Israel has also agreed to the temporary ceasefire.
The near-closure of the vital waterway through which about 20 per cent of global oil flows, has roiled energy markets and heightened risks of rising inflation and a global economic slowdown, Trivedi said.
Despite the sharp fall, oil prices remain elevated.
During the conflict in West Asia, WTI crude jumped by USD 50.74, or 76 per cent, from USD 66.89 per barrel recorded on February 27, 2026, while Brent gained USD 39.51, or nearly 55 per cent from USD 72.29 per barrel during the same period.
Viram Shah, Co-Founder and CEO, Vested Finance, said, “Despite crude prices falling back below USD 100, refined fuel supply chains and shipping confidence are expected to take weeks, if not months, to normalise.” He said this episode reinforces how quickly geopolitics can override fundamentals, with oil moving from USD 80 levels to well above USD 120 and then correcting sharply within weeks as the Strait of Hormuz disruption unfolded and partially reversed.
“The current market move is less about a structural improvement and more about unwinding extreme risk positioning, and the key from here will be whether the ceasefire evolves into a more durable agreement.
“Until then, markets are likely to remain event-driven, with the potential for equally sharp repricing across oil, inflation expectations, and risk assets if tensions escalate again,” Shah added. PTI HG HG DR DR
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