Oil falls to pre-war levels as Hormuz traffic returns – where are petrol and diesel prices? | Today’s news

Oil prices fell to pre-war levels on Thursday as the United States said flows through the Strait of Hormuz were nearing normal and its top diplomat ended a trip to the Persian Gulf to drum up support for a tentative deal with Iran.

Brent crude, the international benchmark, fell to around $72-73 a barrel while US crude fell below $70 a barrel, erasing the geopolitical risk premium that drove prices as high as $120 a barrel during the height of the conflict earlier this year, news agency PTI reported.

Read also | Nifty 50 up 2% in last 2 years. Could there be another run with the bulls?

Both benchmarks are now back near levels last seen in late February, before hostilities disrupted Middle Eastern energy markets.

Gasoline and diesel prices

Despite the sharp drop in oil prices, retail fuel rates were unchanged on Thursday.

Gasoline and diesel prices increased by approx ₹7.50 per liter each during the recent surge in international oil prices, but state-run fuel retailers have so far refrained from cutting pump prices, according to industry data.

Read also | Oil prices fall to $70: Will your next flight cost less? Here’s what the government said

Officials said the state’s three fuel retailers are currently earning healthy marketing margins on petrol, although diesel sales continue to generate a slight loss. The companies held retail prices steady for nearly two-and-a-half months despite rising global oil prices before making only partial increases.

Industry officials noted that fuel prices are not adjusted based on daily movements in international oil markets, but are usually guided by average oil prices over the past fortnight or months.

As a result, it may take some time for any benefit from the recent oil price correction to show up at the pump if lower international rates persist.

The release of tension on the oil market was also reflected in the government’s response. Inter-ministerial briefings that were launched after the conflict broke out have been quietly suspended, signaling less concern about an immediate power cut.

The briefings, initially held daily and later reduced to twice a week, brought together officials from key ministries to update the public on the country’s preparedness and handling of the crisis. Officials from the Ministry of Petroleum and Natural Gas were regularly present to outline the measures taken to secure fuel supply and maintain market stability.

Read also | Gift Nifty to Nasdaq sell-off: 10 key things that changed for the market overnight

There were no briefings this week on Monday and Thursday as scheduled, underscoring the government’s assessment that risks to energy supplies and trade flows have eased after hostilities de-escalated and oil prices fell.

The basket of crude oil that India buys averaged $71.17 a barrel on February 27 – a day before the US and Israel attacked Iran, prompting a sweeping retaliation by Tehran that effectively closed the Strait of Hormuz, which carried oil and gas from Gulf countries to user countries such as India.

The Indian basket averaged $70.71 per barrel on June 24, according to data from the petroleum ministry’s Petroleum Planning and Analysis Cell (PPAC).

Read also | Gift Clever to oil prices: 10 things that changed in the market over the weekend

For the month (June), the Indian basket averaged $86.31 per barrel compared to the February 2026 average of $72.47 per barrel.

With Brent crude now returning to pre-conflict levels, pressure is likely to mount on fuel retailers and the government to pass on some of the gains to consumers, especially if crude remains below recent highs for an extended period. Lower fuel prices could further ease inflationary pressures and support consumer spending in Asia’s third-largest economy.

The decline follows the normalization of tanker traffic through the Strait of Hormuz, through which about a fifth of the world’s oil reserves pass. US officials said at least 20 million barrels had passed through the waterway in the past 24 hours, with flows approaching pre-war levels.

Impact

For India, which imports more than 88 percent of its oil requirements, every drop in oil prices by $10 a barrel translates into billions of dollars in annual savings on the import bill and helps reduce the current account deficit.

The drop in oil prices is expected to ease pressure on retail inflation by reducing fuel, transport and manufacturing costs. It could also reduce the burden of energy subsidies and improve government finances, giving policymakers more fiscal flexibility.

Read also | Oil prices rebound after sell-off, progress in Strait of Hormuz awaits

Lower oil prices are particularly beneficial for industries such as aerospace, paints, chemicals, logistics and consumer goods, where the main input costs are fuel and petrochemical derivatives.

Shares of fuel-intensive companies have already reacted positively, with investors betting on improving margins.

The fall in oil also boosts the rupee’s prospects by reducing demand for dollars to pay for energy imports. A lower oil bill can help curb imported inflation and boost domestic consumption, a key driver of India’s economic growth.

Read also | Oil prices rose 2% as Trump issued a fresh threat during US-Iran peace talks

Market participants said the sharp reversal showed how quickly geopolitical risk premiums can unwind once fears of supply disruptions subside.

Brent crude has fallen more than 20 percent this month and is about 30 percent below highs reached during the conflict, as Gulf exports recover and fears of shortages ease.

For the Reserve Bank of India, softer energy prices could further strengthen the case for maintaining an accommodative stance if inflation remains contained, providing further support to economic activity.

While analysts caution that geopolitical risks in the Middle East have not completely disappeared, Thursday’s move marks a return to price levels that prevailed before the conflict, bringing immediate relief to one of the world’s most oil-dependent major economies.

Hormuz traffic will rebound

U.S. Energy Secretary Chris Wright said supplies through the strait were approaching levels seen before February 28, when the U.S. and Israel launched airstrikes on Iran, with at least 20 million barrels leaking through the strait in the previous 24 hours.

During the conflict, Iran took effective control of a vital choke point, disrupting oil flows and shaking global energy markets and the wider economy.

Despite the recovery in traffic, Iran has indicated it will continue to enforce control. The Revolutionary Guards on Thursday warned vessels to stick to routes through the strait designated by Tehran, rejecting newly announced shipping routes uncoordinated with Iran as unacceptable and dangerous.

(With inputs from PTI, Reuters)