Brent Crude Falls Below $80 Amid US-Iran Agreement Hopes, Strengthens Indian Rupee

New Delhi, June 17: Global crude oil prices saw a decline of nearly 1 percent on Wednesday as investors assessed the potential resolution of the Iran conflict and the reopening of the Strait of Hormuz.

The international oil benchmark, Brent Crude, dropped by 0.72 percent to $78.39 per barrel, while U.S. West Texas Intermediate (WTI) crude fell approximately 1 percent to $75.35 per barrel.

Market selling pressure increased following reports of a potential interim agreement between the U.S. and Iran aimed at ending the conflict in West Asia. U.S. President Donald Trump stated that Tehran would not acquire nuclear weapons, and a U.S. official indicated that Iran would be permitted to sell oil once the agreement is signed.

Under the memorandum of understanding signed this week, the ceasefire announced in April has been extended for another 60 days to allow both parties to negotiate a permanent peace agreement.

According to the agreement, the U.S. will lift its restrictions on Iranian ports, while Tehran will allow oil tankers and other maritime traffic to pass through the Strait of Hormuz. Iran had effectively blocked this route since attacks were initiated by the U.S. and Israel on February 28.

Meanwhile, the Indian rupee also strengthened. On Wednesday, the domestic currency traded at 94.29 against the U.S. dollar, gaining 31 paise from the previous session’s close of 94.56.

Experts noted a positive sign in the reduction of outflows from foreign institutional investors (FIIs). They believe this trend may continue as the rupee strengthens, with further appreciation expected.

They stated, “After the sharp decline in Brent Crude, its price has settled around $79. Additionally, significant capital inflow is anticipated through the FCNR(B) deposit scheme in India. This could further strengthen the rupee, discouraging FIIs from selling.”

They further suggested that given the potential for further rupee appreciation, FIIs may resume buying, which could bolster the Indian stock market and maintain market stability.