Crude oil prices fell more than 16% last week, their steepest weekly decline since 2020, as hopes for Middle East diplomacy eased fears of a wider war. Brent crude traded near USD 97 a barrel on Monday after reaching a six-month high in late October. Yet attacks on tankers and Saudi energy sites continued, while major oil agencies prepared fresh reports. The decline could reduce India's import costs, although domestic petrol and diesel prices may not fall immediately.
The selloff followed a shift in market expectations. Oil had reached a six-month high in late October as fighting across the Middle East threatened energy supplies. Prices then retreated as traders weighed the possibility of reduced hostilities.
Market analysts linked part of the change to the US midterm elections. President Donald Trump's Republican Party suffered defeats, raising hopes that the military conflict would not escalate further. Expectations of a diplomatic settlement also grew, although the fighting continues.
The drop reflects those changing expectations rather than an end to the conflict. Diplomatic talks with Iran remain important for crude oil prices, while uncertainty about future attacks persists. Uncertainty remains over possible future attacks.
Oil traders are also following efforts to end the Russia-Ukraine war. Russia plans to send a senior delegation to US-mediated peace talks in Abu Dhabi on November 10. Those discussions add another diplomatic event to a week already filled with oil market updates.
Fresh incidents showed that violence had not stopped. United Kingdom Maritime Trade Operations said an unidentified projectile struck a tanker traveling through the Strait of Hormuz over the weekend. The report kept ongoing regional shipping risks in focus.
Meanwhile, Yemen's Iran-backed Houthi rebels targeted Saudi Aramco offices in Riyadh. Saudi forces responded by destroying two missile launchers. The incidents added to scattered attacks across the Persian Gulf and other parts of the Middle East.
Can lower crude oil prices hold while attacks continue across the region? That question comes as supply flows recover alongside ongoing security threats. Shipping incidents have continued, yet Gulf crude exports have nearly returned to their prewar levels.
A Bloomberg survey found that OPEC oil production recovered to about 88% of February levels. The improvement suggests more supply is reaching the market despite the conflict. At the same time, continued attacks leave traders watching how reliably those flows can continue.
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India imports around 85% of its crude oil needs, making global prices important for its economy. Higher prices increase the country's dollar spending on energy. They can also widen its import bill and current account deficit.
When expensive crude persists, oil companies face pressure to raise petrol and diesel prices. Costlier diesel can increase freight charges, which then affect vegetables, fruit, groceries and other essentials. Transport costs therefore connect international oil movements with household budgets.
Lower crude prices ease some of that pressure. India can spend less on imports and conserve foreign exchange, while oil companies may gain room to keep fuel prices stable. Cheaper transport can help contain increases in daily living costs.
Still, falling global prices do not guarantee immediate cuts at fuel stations. Domestic pricing also depends on whether state-owned oil companies have recovered earlier losses. If Brent stays near USD 95 to USD 98 or lower, refining margins could improve. That may allow a possible Rs. 2 to Rs. 4 per litre reduction, rather than an announced cut.
Attention now turns to three scheduled market updates. The US Energy Information Administration releases its report on Tuesday, November 10. OPEC follows with its monthly report on Wednesday, November 11. The International Energy Agency publishes its oil market report on Friday, November 13.
Crude oil's weekly drop of more than 16% has brought Brent near USD 97 as markets consider a diplomatic opening. Yet tanker and Saudi energy-site attacks continue, even as Gulf supply recovers. India may benefit from lower import costs, while EIA, OPEC and IEA reports could shape near-term expectations.