Oil falls to pre-war levels as Hormuz traffic rebounds — where do petrol, diesel prices stand?

Oil Prices Dip to Pre-War Levels as Hormuz Traffic Normalizes

Theindiapostdaily.com – Following a recent de-escalation in Middle East tensions, international oil prices declined to levels seen before the conflict, according to reports from the news agency PTI. The United States highlighted that oil flows through the Strait of Hormuz are now approaching pre-war norms, marking a shift in geopolitical risk perceptions.

Global Oil Market Trends

Brent crude, the global price standard, fell to approximately $72-73 per barrel, while US crude prices dropped below $70 per barrel. This decline erased the premium previously added due to the conflict, which had pushed prices as high as $120 per barrel earlier this year.

“Brent crude… $72-73 a barrel, while US crude fell below $70 a barrel, erasing the geopolitical risk premium that had driven prices as much as $120 a barrel during the height of the conflict earlier this year,”

The two major benchmarks are now hovering near values recorded in late February, before hostilities disrupted energy markets in the region.

India’s Fuel Pricing Dynamics

Despite the drop in crude oil prices, retail fuel rates in India remained unchanged on Thursday. Industry data indicates that state-owned fuel retailers had raised prices by about ₹7.50 per litre during the recent spike, but have yet to lower them, as per recent reports.

Officials noted that the three state-run fuel retailers are currently realizing substantial marketing profits on petrol, though diesel sales continue to yield modest losses. These companies maintained stable retail prices for nearly two-and-a-half months, even as global crude prices climbed, before implementing a partial increase.

Industry experts explained that fuel prices are adjusted based on average international oil prices from the past fortnight or month, rather than daily fluctuations. Consequently, any benefits from the current correction in crude prices may not immediately translate to lower pump prices if the trend persists.

Government Response and Strategic Adjustments

The easing of energy market tensions is evident in the government’s reduced emphasis on frequent briefings. Initially held daily, these inter-ministerial sessions were later scaled back to twice weekly to update the public on preparedness and crisis management. Officials from the Ministry of Petroleum and Natural Gas regularly participated, detailing measures to secure fuel supplies and stabilize markets.

This week, no briefings were conducted on Monday and Thursday, signaling the government’s confidence that risks to energy supplies and trade flows have eased. The decision underscores a shift in priorities as the situation stabilizes.

Economic Impact and Sector Benefits

For India, which imports over 88% of its crude oil, a $10-per-barrel drop in oil prices results in annual savings of billions of dollars on its import bill. This reduction also helps narrow the current account deficit.

Lower oil prices are expected to ease retail inflation by reducing costs for fuel, transportation, and manufacturing. Additionally, they could alleviate energy subsidy burdens, improving government finances and granting policymakers more fiscal flexibility.

Industries reliant on fuel and petrochemical derivatives—such as aviation, chemicals, and logistics—stand to gain significantly from the decline. Shares of companies in these sectors have already shown positive reactions to the market shift.

Crude Oil Basket Analysis

According to data from the Petroleum Planning and Analysis Cell (PPAC), the Indian crude oil basket averaged $71.17 per barrel on February 27, the day before the US-Israel attack on Iran. This event triggered retaliatory measures by Tehran, effectively halting oil and gas transit through the Strait of Hormuz.

On June 24, the basket’s average dipped to USD 70.71 per barrel. For the month of June, the average stands at USD 86.31 per barrel, compared to USD 72.47 per barrel in February 2026.

Conclusion

The normalization of tanker traffic through Hormuz, with over 20 million barrels transiting the waterway in the past 24 hours, has contributed to the price decline. As global markets stabilize, pressure grows for fuel retailers and the government to pass on savings to consumers, potentially further easing inflationary pressures in Asia’s third-largest economy.