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US / IsraelβIran War Β· Crude Market Update
- The US EIA revised its forecasts to show a much larger and longer disruption to global oil supplies from the Iran war than previously projected, highlighting the uncertainty that has affected broader energy markets since the conflict began three months ago.
- Iran's blockade of the Strait of Hormuz continues to remove millions of barrels of global oil supply daily, with the EIA now assuming the Strait will remain closed through the end of May'26.
- The agency estimates that 10.5 MBpd of oil output was shut in across the Middle East in Apr'26, rising to a peak of 10.8 MBpd this month as Middle Eastern storage tanks reach maximum capacity, leading to bigger draws from global oil stockpiles and elevated oil prices.
- Iraq and Pakistan have struck deals with Iran to transport oil and liquefied natural gas through the Strait of Hormuz, demonstrating Iran's ability to control energy flows. Iraq, which relies heavily on oil exports, secured safe passage for two very large crude carriers, while Pakistan, which has sought to mediate in the conflict, received two Qatari LNG tankers.
- A Panama-flagged crude oil tanker managed by Japanese refining group Eneos successfully passed through the Strait of Hormuz, marking the second Japan-linked ship to do so since the US-Israeli war on Iran disrupted oil supplies. The tanker is carrying 1.2 mln bbl of Kuwait crude and 0.70 mln bbl of Emirati Das Blend oil, expected to arrive in Japan on 03rd Jun'26.
GCC Bypass Pipelines Running Near Capacity β But Shah Gas Field Ablaze and Fujairah Zone Struck
- Saudi Arabia's East-West pipeline is pumping oil at its full capacity of 7 MBpd, bypassing the Strait of Hormuz. Crude oil exports from Yanbu port have reached 5 MBpd, and the country is also exporting 0.70 to 0.90 MBpd of oil products.
- Of approximately 15 MBpd of crude transiting the Strait of Hormuz in OND'25, combined SPR releases and bypass pipeline capacity can offset roughly two-thirds β or slightly more β for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
- New strikes directly threaten this buffer β Iranian drones struck the UAE's Shah gas field (currently ablaze) and the Fujairah Oil Industry Zone on Mar 17. A tanker was also hit near the Strait of Hormuz. Saudi Arabia intercepted over a dozen drones; Kuwait and Bahrain sustained additional attacks. These represent the first direct strikes on GCC energy export infrastructure since the conflict began.
Country
Pre-war (Feb'26) Production
17th Mar'26 Estimated Offline Capacity
17th Mar'26 Production
23rd Mar'26 Estimated Offline Capacity
23rd Mar'26 Production
31st Mar'26 Estimated Offline Capacity
Apr'26 Scenario Estimated Offline Capacity
Saudi Arabia
10.1
2.0
8.1
2.3
7.8
2.5
2.7
Iraq
4.2
3.3
0.9
3.6
0.6
3.9
3.9
Kuwait
2.6
1.3
1.3
2.0
0.6
2.6
2.6
UAE
3.4
1.6
1.8
1.6
1.8
2.0
2.0
Iran
3.2
0.0
3.2
0.0
3.2
0.5
0.6
Total
23.5
8.2
15.3
9.5
14.0
11.5
11.8
Reduction in Supply
β
8.2
β
9.5
β
11.5
11.8
SPR Release
β
0.7
β
1.0
β
1.0
2.4
Iran's Floating Storage (FS) Release
β
--
β
0.7
β
0.7
0.8
Russia's FS Release
β
2.0
β
2.0
β
2.0
2.0
Other Nations Higher Production amid higher prices
β
0.3
β
0.3
β
0.3
0.4
Incremental Supply
β
3.0
β
4.0
β
4.0
5.6
Net Supply Reduction
β
5.2
β
5.5
β
7.5
6.2
Supply & Demand Analysis
War Scenarios Point to Global Supply Deficit of 1.35β1.90 MBpd in 2026 and AMJ Quarter Most Severe with a deficit of 3.00 - 4.50 MBpd.
Pre-war, global supply and demand were near-balanced with a modest surplus of +0.55 MBpd projected for 2026. Both conflict scenarios introduce significant supply deficits driven by Strait of Hormuz disruptions and impacts on Iraq and Kuwait crude production.
Pre-War Scenario β Global S&D Balance (MBpd)
Period
Global Supply
Global Demand
S&D Balance
2025e
103.57
102.94
+0.63
2026p
104.29
103.74
+0.55
JFM '26p
103.80
103.50
+0.30
AMJ '26p
104.40
103.75
+0.65
JAS '26p
104.35
103.80
+0.55
OND '26p
104.60
103.90
+0.70
Scenario 1 β Preferred
Period
Supply
Demand
Balance
2025e
103.57
102.94
+0.63
2026p
102.36
102.98
β0.63
JFM '26p
101.80
102.80
β1.00
AMJ '26p
99.60
102.13
β2.53
JAS '26p
103.43
103.40
+0.03
OND '26p
104.60
103.60
+1.00
Scenario 2 β Alternate
Period
Supply
Demand
Balance
2025e
103.57
102.94
+0.63
2026p
100.23
102.13
β1.90
JFM '26p
101.80
102.80
β1.00
AMJ '26p
97.10
101.60
β4.50
JAS '26p
100.00
102.00
β2.00
OND '26p
102.00
102.10
β0.10
- Scenario 1 (Preferred): Ceasefire talks to remain on a progressive note and flows through the Strait of Hormuz improving over the coming weeks; however crude oil production losses will be there due to further non-availability of storage on on-shore in Iraq, Kuwait and other small Middle East nations.
- Scenario 2 (Alternate): No major deal being achieved from ceasefire talks and post completion of ceasefire talks, tensions continuing to remain in the Middle East and flows through the Strait of Hormuz continuing to remain restrained. Crude Oil Production Facilities & Refining Centers in the Middle East region getting affected and trade disruptions in Strait of Hormuz will be there for medium to long term (4 to 7 months).
Brent Crude 1M Futures are expected to trade in a range of 100 USD/bbl to 125 USD/bbl over the coming 1 to 2 weeks. The coordinated SPR release and GCC bypass capacity provide a meaningful supply cushion that limits sustained upside beyond these levels.
Brent Crude 1M Futures β Projected 1β2 Week Trading Range
$90 floor
$100 base
$125 ceiling
$90β$100 Β· Normal Range
$100β$125 Β· Elevated war premium
Metals & Energy Market Update β Geopolitical Context (Iran Conflict)
Geopolitical backdrop: U.S.-Iran ceasefire negotiations advance, but long-term deal remains uncertain, extending uncertainty in the region and sustaining volatility across commodities.
The United States and Iran are reportedly approaching a limited short-term ceasefire agreement aimed at preventing further escalation in the Middle East conflict, although prospects for a comprehensive settlement remain constrained by persistent disagreements surrounding Iranβs nuclear program and its stockpile of highly enriched uranium. Current negotiations, are focused on establishing an interim framework that would formalize a cessation of hostilities, ensure the reopening and stabilization of shipping flows through the Strait of Hormuz, and create a 30-day window for broader diplomatic negotiations. Nevertheless, substantial gaps between Washington and Tehran continue to limit visibility on a durable long-term resolution.
Steel:
- Domestic steel prices have moderated from recent highs.
- Steel supply chains remain largely insulated from the Middle East conflict.
- Hot-rolled coil prices declined by ~INR 1,800/ton in April β26, ending at ~INR 57,850/ton (BigMint).
- Initial war-driven risk premium has been partially unwound.
Base metals:
- Copper ended last week up by 7%, primarily due to supply risks linked to sulphuric acid and Grasberg mine.
- Aluminum rose by 0.2% linked to Gulf region supply disruptions. However, demand softness now driving price action.
- IMF downgraded 2026 global growth to 3.1% (from 3.3% earlier and 3.4% in 2025), highlighting war-related downside risks.
Precious metals:
- Volatility has eased, but prices face upward pressure, due to improving market sentiment in peace talks.
- However, any esclation and halt in a resolution will pressure on Precious Metals.
- Stronger U.S. yields and weak industrial offtakeβespecially autoβare suppressing any upside momentum.
IOCL Price Update β 1 May 2026
- Unchanged: Retail Petrol, Diesel, Domestic LPG (14.2 kg @ Rs 913 in Delhi), ATF for domestic airlines, and PDS Kerosene β covering -80% of petroleum products.
Revised upward:
β’ 19 kg Commercial LPG: +Rs 993 (Delhi: Rs 2,078.50 β Rs 3,071.50; Mumbai: Rs 2,031 β Rs 3,024)
β’ 5 kg Free Trade LPG (FTL): +Rs 261 per cylinder.