New Delhi | Crude oil price slumped over 11 per cent to Rs 8,588 per barrel in futures trade on Wednesday, tracking sharp losses in global benchmarks amid signs of a potential breakthrough between the US and Iran.
On the Multi Commodity Exchange (MCX), crude for the May delivery plunged Rs 1,110, or 11.45 per cent, to Rs 8,588 per barrel in a business turnover of 12,132 lots.
Similarly, the June contract also nosedived by Rs 1,098, or 11.69 per cent, to Rs 8,298 per barrel in 4,274 lots.
Analysts said oil prices came under heavy pressure following reports that Washington and Tehran are nearing a preliminary agreement aimed at ending the conflict and paving the way for broader nuclear negotiations.
The proposed framework is said to include a moratorium on Iran's nuclear enrichment in exchange for sanctions relief and the release of billions of dollars in frozen Iranian funds, along with easing restrictions on shipping through the Strait of Hormuz, according to reports.
In the international market, crude prices fell sharply, with Brent oil for the July contract plummeting USD 11.57, or 10.53 per cent, to USD 98.30 per barrel, while West Texas Intermediate (WTI) declined by USD 12.39, or 12.11 per cent, to USD 89.88 per barrel in New York.
Brokerage firm Kotak Securities said oil prices declined for the second straight session as geopolitical risk premium eased after US President Donald Trump's decision to temporarily pause Hormuz escort operations to allow negotiations to progress and confirmed that a ceasefire remains in place.
Meanwhile, US Defense Secretary Pete Hegseth said the truce remained intact, while American military officials indicated recent regional flare-ups do not warrant escalation, further dampening oil prices.
Norbert Rucker, Head of Economics and Next Generation Research at Julius Baer, said: "The twists and turns continue. The US called off the safeguarding of trade through Hormuz again, keeping uncertainty high, and transits are down to a trickle for the time being".
Oil prices dropped below USD 100 per barrel despite the persistent gridlock, possibly for the simple fact that these latest twists triggered some hostilities but not a pronounced escalation, he added.