Impact Assessment of US/Israel-Iran Conflict
Impact Assessment of US/Israel-Iran Conflict
⚡
US / IsraelβIran War Β· Market Update
- On 08th Jun'26, Iran backed militant group Houthis indicates that they would ban Israeli maritime navigation through the red sea, adding pressure on global shipment flows through the key transit routes.
- Russia's crude exports from its western ports (Primorsk, Ust-Luga, and Novorossiysk) are expected to fall sharply to 1.7 MBpd in Jun'26 from 2.5 MBpd in May'26, as the country diverts more crude to domestic refineries and seeks to increase refinery runs by 0.25β0.40 MBpd to address seasonal fuel shortages.
- Russian oil production has been declining due to refinery maintenance and Ukrainian drone attacks, with output estimated to have fallen 0.30β0.40 MBpd in Apr'26 (the largest drop since 2020) and a further 0.10 MBpd in May'26, while recovery is expected to take time.
- Abu Dhabi National Oil Company has issued its second crude oil tender within a week, offering up to 2 mln bbl of Upper Zakum, Umm Lulu, and Das crude for Jun'26βAug'26 loading.
- The move highlights ADNOC's efforts to maintain exports despite disruptions around the Strait of Hormuz, with some shipments reportedly transported using tankers with tracking systems turned off and completed via ship-to-ship transfers or direct deliveries to buyers.
- Israel said it struck military targets in western and central Iran on 08th Jun'26 after Iran launched missiles at Israeli targets, despite reports that US President Trump had urged Israeli Prime Minister Benjamin Netanyahu to avoid further attacks while US-Iran peace talks continue.
- Saudi Aramco cut its July crude oil official selling prices (OSPs) to Asia for a second consecutive month, lowering the premium for Arab Light crude by 6.0 USD/bbl to 9.5 USD/bbl above the Dubai/Oman benchmark, reflecting weaker spot market premiums and sluggish demand, particularly from China.
- Despite the reduction, OSPs remain elevated compared to pre-war levels due to ongoing disruptions to energy flows through the Strait of Hormuz caused by the Iran conflict, while prices to other regions were also reduced.
War Impact on Crude Oil & Gasoil/Diesel Prices
War Impact on Gasoline, ATF & Natural Gas Prices
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:
Israel and Iran traded the worst exchange of fire since the April truce, with Iran firing missiles at Israeli targets and Israel carrying out strikes on western and central Iran. Brent bounced back strongly as renewed tensions stoked fresh supply fears and Hormuz near-closure continues to put a structural floor under prices. Equities saw sharp selloff in Asia at the open as well, with Kospi down by 14%, Nikkei down by 1.31% and Nifty down by 1.2%, S&P down by 2.64%, and Nasdaq registered a heavy sell-off and marked a 4.18% loss. Higher energy, slower growth, and limited room for rate cuts keep yields elevated. Safe-haven flows are rotating into money markets and short-duration paper.
Steel:
- Domestic steel prices have moderated from recent highs.
- Steel supply chains remain largely insulated from the Middle East conflict.
- Since, the start of war steel HRC prices are up by 8.7%.
Base metals:
- Copper ended last week down by 1%, primarily due to stronger dollar and weak demand.
- Aluminum rose by 18.3% since start of war 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.
LPG Market Update - 09 June 2026
- Indiaβs LPG market saw another upward revision on 1st June 2026 , with oil marketing companies increasing commercial cylinder prices. Commercial LPG prices were raised across major cities, with the 19 kg cylinder in Delhi increasing by Rs 42 to Rs 3,113.50. Similar hikes were reported nationwide, ranging from Rs 42 to Rs 53.50 per cylinder.
Indiaβs domestic LPG market witnessed a price revision on 7 June 2026, with Oil Marketing Companies (OMCs) increasing the price of the 14.2 kg domestic LPG cylinder by βΉ29 per cylinder across the country. - In addition to commercial cylinders, oil marketing companies also increased the price of 5 kg Free Trade LPG (FTL) cylinders by Rs 11. Following the revision, the retail price of a 5 kg FTL cylinder in Delhi now stands at Rs 821.50. FTL cylinders are sold outside the subsidized domestic LPG system and are commonly used by migrant workers, temporary households, street vendors, and consumers requiring smaller LPG packs.
Impact Assessment of US/Israel-Iran Conflict
⚡
US / IsraelβIran War Β· Market Update
- Israel said it struck military targets in western and central Iran on 08th Jun'26 after Iran launched missiles at Israeli targets, despite reports that US President Trump had urged Israeli Prime Minister Benjamin Netanyahu to avoid further attacks while US-Iran peace talks continue.
- Saudi Aramco cut its July crude oil official selling prices (OSPs) to Asia for a second consecutive month, lowering the premium for Arab Light crude by 6.0 USD/bbl to 9.5 USD/bbl above the Dubai/Oman benchmark, reflecting weaker spot market premiums and sluggish demand, particularly from China.
- Despite the reduction, OSPs remain elevated compared to pre-war levels due to ongoing disruptions to energy flows through the Strait of Hormuz caused by the Iran conflict, while prices to other regions were also reduced.
- Trump insisted that the latest strikes would not derail efforts to reach a deal with Iran, claiming the negotiations remain close to success, while Iran warned that US bases and Israeli assets remain legitimate targets if hostilities continue.
- The US crude stocks drew more than expected last week as export and refining demand remained strong, with many countries in Asia and Europe seeking to replace Middle Eastern oil and fuel supplies cut off by the Iran war. Crude inventories fell by 8 mln bbl to 433.7 mln bbl, and oil exports touched 5.9 MBpd, the second-highest level on record.
- According to the International Energy Agency, global oil inventories could reach critical levels before the peak summer demand period if stock draws continue at their current pace.
- Demand typically peaks during Northern Hemisphere summer holidays. In the best-case scenario, it could take six to eight months to reopen the Strait of Hormuz if an agreement was reached today, which could lead to a possible coordinated emergency stock release by the IEA, but not currently being discussed as half of the initial 400 mln bbl coordinated release from Mar'26 is yet to hit the market.
- The US crude exports reached a record high of 5.6 MBpd in May'26 due to the Middle East crisis, which increased demand from Asian and European refiners. The US and Israel's war with Iran disrupted global energy markets, causing refiners to seek alternatives to Middle Eastern supply. US crude exports surged past the previous record set in Apr'26 of 5.2 MBpd, with Asia taking 2.45 MBpd and Europe 2.4 MBpd of the barrels exported in May'26.
War Impact on Crude Oil & Gasoil/Diesel Prices
War Impact on Gasoline, ATF & Natural Gas Prices
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:
Israel and Iran traded the worst exchange of fire since the April truce, with Iran firing missiles at Israeli targets and Israel carrying out strikes on western and central Iran. Brent bounced back strongly as renewed tensions stoked fresh supply fears and Hormuz near-closure continues to put a structural floor under prices. Equities saw sharp selloff in Asia at the open as well, with Kospi down by 14%, Nikkei down by 1.31% and Nifty down by 1.2%, S&P down by 2.64%, and Nasdaq registered a heavy sell-off and marked a 4.18% loss. Higher energy, slower growth, and limited room for rate cuts keep yields elevated. Safe-haven flows are rotating into money markets and short-duration paper.
Steel:
- Domestic steel prices have moderated from recent highs.
- Steel supply chains remain largely insulated from the Middle East conflict.
- Since, the start of war steel HRC prices are up by 8.7%.
Base metals:
- Copper ended last week down by 1%, primarily due to stronger dollar and weak demand.
- Aluminum rose by 18.3% since start of war 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.
LPG Market Update - 02 June 2026
- India's LPG market saw another upward revision on 1st June 2026 , with oil marketing companies increasing commercial cylinder prices Commercial LPG prices were raised across major cities, with the 19 kg cylinder in Delhi increasing by Rs 42 to Rs 3,113.50. Similar hikes were reported nationwide, ranging from Rs 42 to Rs 53.50 per cylinder. Kolkata recorded the sharpest increase of Rs 53.50, taking prices to Rs 3,255.50, while Hyderabad and Bhubaneswar saw hikes of Rs 52 each. Mumbai's commercial LPG price rose by Rs 43.50 to Rs 3,067.50, and Chennai's rate increased by Rs 46 to Rs 3,283.00.
- In addition to commercial cylinders, oil marketing companies also increased the price of 5 kg Free Trade LPG (FTL) cylinders by Rs 11. Following the revision, the retail price of a 5 kg FTL cylinder in Delhi now stands at Rs 821.50. FTL cylinders are sold outside the subsidized domestic LPG system and are commonly used by migrant workers, temporary households, street vendors, and consumers requiring smaller LPG packs.
- For June, Saudi Aramco CPs increased further to USD 760/ton for propane and USD 820/ton for butane, reflecting continued market tightness and persistent concerns over Middle East supply security.
In contrast, Algeria's Sonatrach moved in the opposite direction, implementing substantial reductions in its June LPG benchmarks. Propane prices were cut by USD 125/ton to USD 575/ton, representing an 18% decline from May levels. Butane experienced an even sharper correction, falling by USD 270/ton to USD 610/ton, a drop of approximately 31%.
Impact Assessment of US/Israel-Iran Conflict
⚡
US / IsraelβIran War Β· Market Update
- The US crude exports reached a record high of 5.6 MBpd in May'26 due to the Middle East crisis, which increased demand from Asian and European refiners. The US and Israel's war with Iran disrupted global energy markets, causing refiners to seek alternatives to Middle Eastern supply. US crude exports surged past the previous record set in Apr'26 of 5.2 MBpd, with Asia taking 2.45 MBpd and Europe 2.4 MBpd of the barrels exported in May'26.
- According to market grapevines the Lukoil-owned Volgograd oil refinery in Russia's south has suspended oil processing since 29th May'26 due to a Ukrainian drone attack that caused fire and damages. The attack has halted the crude distillation unit CDU-1, which accounts for 40% of the plant's capacity, and stopped other units CDU-6 and CDU-5.
- The refinery processed 13.5 million metric tons of oil in 2024, accounting for 5% of total Russian refinery volume, producing 6 million tons of diesel, 1.9 million tons of gasoline, and 700,000 tons of fuel oil.
- Iran is seeking a limited interim agreement with the United States to ease economic pressure, stabilise the situation at home, and avoid major concessions on its nuclear programme. The approach reflects a familiar playbook for the Islamic Republic: absorb pressure, avoid irreversible compromises and keep negotiations alive without shifting core positions.
- India will cut its export duties on petrol, diesel, and aviation turbine fuel (ATF) for the fortnight starting 01st Jun'26, based on average international prices of crude oil, petrol, diesel, and ATF since the last review. The duty on exports of petrol has been set at 1.5 rupees per litre, while that on diesel has been set at 13.5 rupees per litre.
- Export duties on ATF have been set at 9.5 rupees per litre. There is no change in the existing excise duty rates on petrol and diesel cleared for domestic consumption.
- China's seaborne crude oil imports fell to their lowest in almost 10 years in May, dropping to 6.36 MBpd, due to the impact of the Iran war and the closure of the Strait of Hormuz.
- The collapse in China's imports is being framed as helping Asia adjust to the loss of at least 10 MBpd of crude, but it is a serendipitous side effect rather than any altruism on Beijing's part.
- The primary driver behind the collapse in China's oil imports is the conflict in the Middle East, but the real challenge is in working out the why and how of what China is doing to adapt to the loss of as much as 10% of global crude supplies from the Iran conflict.
- According to the Energy Information Administration the US crude production remained steady at 13.7 MBpd in Mar'26. Texas crude output fell to a four-month low, while New Mexico production was unchanged. The US crude production is expected to rise as operators increase output in response to high oil prices due to the Iran war.
- Venezuela's oil exports rose to 1.25 MBpd in May'26, marking the third consecutive month of increase, driven by more cargoes to the US, India, and Europe. Under the US-supported government of interim President Rodriguez, Venezuelan crude production and exports have bounced this year as Washington eased sanctions and foreign companies expanded oil and gas projects in the OPEC nation.
War Impact on Crude Oil & Gasoil/Diesel Prices
War Impact on Gasoline, ATF & Natural Gas Prices
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:
The ongoing conflict in the Middle East, continues to weigh on global markets and keeping inflation expectations elevated. The war-driven rise in energy prices has heightened concerns about higher transportation and manufacturing costs globally, adding further pressure to already elevated inflation. At the same time, elevated crude prices continue to weigh on emerging markets and developing economies, particularly large energy-importing nations, as higher import bills and currency pressures weaken economic stability and complicate monetary policy decisions in the nearterm.
Steel:
- Domestic steel prices have moderated from recent highs.
- Steel supply chains remain largely insulated from the Middle East conflict.
- Since, the start of war steel HRC prices are up by 9.0%.
Base metals:
- Copper ended last week up by 0.5%, primarily due to widening LME-CME spread.
- Aluminum rose by 19.4% since start of war 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.
LPG Market Update - 02 June 2026
- India's LPG market saw another upward revision on 1st June 2026 , with oil marketing companies increasing commercial cylinder prices Commercial LPG prices were raised across major cities, with the 19 kg cylinder in Delhi increasing by Rs 42 to Rs 3,113.50. Similar hikes were reported nationwide, ranging from Rs 42 to Rs 53.50 per cylinder. Kolkata recorded the sharpest increase of Rs 53.50, taking prices to Rs 3,255.50, while Hyderabad and Bhubaneswar saw hikes of Rs 52 each. Mumbai's commercial LPG price rose by Rs 43.50 to Rs 3,067.50, and Chennai's rate increased by Rs 46 to Rs 3,283.00.
- In addition to commercial cylinders, oil marketing companies also increased the price of 5 kg Free Trade LPG (FTL) cylinders by Rs 11. Following the revision, the retail price of a 5 kg FTL cylinder in Delhi now stands at Rs 821.50. FTL cylinders are sold outside the subsidized domestic LPG system and are commonly used by migrant workers, temporary households, street vendors, and consumers requiring smaller LPG packs.
- For June, Saudi Aramco CPs increased further to USD 760/ton for propane and USD 820/ton for butane, reflecting continued market tightness and persistent concerns over Middle East supply security.
In contrast, Algeria's Sonatrach moved in the opposite direction, implementing substantial reductions in its June LPG benchmarks. Propane prices were cut by USD 125/ton to USD 575/ton, representing an 18% decline from May levels. Butane experienced an even sharper correction, falling by USD 270/ton to USD 610/ton, a drop of approximately 31%.
RBI MPC meeting Juneβ26
RBI Holds Repo Rate at 5.25% Amid Rising Inflation Risks and Global Uncertainty
- The Reserve Bank of India’s Monetary Policy Committee (MPC) unanimously decided to keep the repo rate unchanged at 5.25% during its June 3β5, 2026 meeting, while maintaining a neutral policy stance. The Standing Deposit Facility (SDF), the Marginal Standing Facility (MSF) and Bank Rate were also held constantly at the level observed at April MPC meet.
| RBI June Policy Decision | Policy Repo Rate | SDF (Standing Facility Rate) | MSF (Marginal Standing Facility) | Bank Rate |
| Previous Rate | 5.25% | 5.00% | 5.50% | 5.50% |
| New Rate | 5.25% | 5.00% | 5.50% | 5.50% |
| New Change | Neutral | Neutral | Neutral | Neutral |
- The decision reflects growing uncertainty stemming from prolonged geopolitical tensions in West Asia, rising energy prices, supply chain disruptions, and weather-related risks.
- The RBI noted that domestic economic activity has remained relatively stable despite external challenges, supported by steady private consumption, ongoing investment activity, strong services exports, and capital expenditure. However, elevated commodity prices, higher import costs, potential supply disruptions, and a forecast of a deficient southwest monsoon are expected to weigh on growth prospects going forward.
- Considering these factors, On the Growth side,Β RBI projected India’s real GDP growth at 6.6% for FY2026-27, while warning that prolonged global disruptions, financial market volatility, and adverse weather conditions remain key downside risks.
- On inflation front, headline CPI rose to 3.48% in April 2026, but the RBI expects price pressures to strengthen in the coming quarters due to higher fuel prices, rising input costs, and possible second-round effects on wages and inflation expectations. Consequently, CPI inflation is projected at 5.1% for FY2026-27, with inflation expected to approach the upper end of the RBI’s tolerance band during the third quarter.
|
RBI Economic Projections β Jun’26 Policy Meet |
|||||
|
FY27 |
|||||
| Q1 | Q2 | Q3 | Q4 | Full Year | |
| Growth Projection | 6.6% | 6.3% | 6.5% | 6.8% | 6.6% |
| Apr’26 projections | 6.8% | 6.7% | 7.0% | 7.2% | 6.9% |
| Change from Apr’26 | -0.2% | -0.4% | -0.5% | -0.4% | -0.3% |
| CPI projections | 4.2% | 5.1% | 5.9% | 5.4% | 5.1% |
| Apr’26 projections | 4.0% | 4.4% | 5.2% | 4.7% | 4.6% |
| Change from Apr’26 | 0.2% | 0.7% | 0.7% | 0.7% | 0.5% |
| Source- RBI April and June Projection | |||||
- In addition to it, RBI has opted to support the Indian Rupee by attracting foreign currency inflows. As part of this effort, the central bank announced a series of measures, including relaxation of regulations governing FCNR(B) and NRE deposits to encourage greater participation from Non-Resident Indians, easing overseas borrowing norms for banks and corporates, and providing incentives aimed at attracting foreign investment into Indian debt markets.
In conclusion, while these measures are supportive for the currency in the near term, their effectiveness will largely depend on external factors such as crude oil prices, geopolitical developments in the Middle East, and the direction of foreign capital flows. With FII outflows remaining elevated and energy market risks persisting, the Rupee could continue to face depreciation pressures despite the RBI’s efforts to bolster dollar inflows.
- The next meeting of the MPC is scheduled for August 3 to 5, 2026.
Stay ahead of market shifts with timely macroeconomic insights, inflation outlooks, currency trends, and commodity market intelligence. Strengthen your procurement and sourcing decisions with data-driven forecasts and expert analysis: Subscribe to our servicesΒ
Impact Assessment of US/Israel-Iran Conflict
⚡
US / IsraelβIran War Β· Market Update
- The US crude exports reached a record high of 5.6 MBpd in May'26 due to the Middle East crisis, which increased demand from Asian and European refiners. The US and Israel's war with Iran disrupted global energy markets, causing refiners to seek alternatives to Middle Eastern supply. US crude exports surged past the previous record set in Apr'26 of 5.2 MBpd, with Asia taking 2.45 MBpd and Europe 2.4 MBpd of the barrels exported in May'26.
- According to market grapevines the Lukoil-owned Volgograd oil refinery in Russia's south has suspended oil processing since 29th May'26 due to a Ukrainian drone attack that caused fire and damages. The attack has halted the crude distillation unit CDU-1, which accounts for 40% of the plant's capacity, and stopped other units CDU-6 and CDU-5.
- The refinery processed 13.5 million metric tons of oil in 2024, accounting for 5% of total Russian refinery volume, producing 6 million tons of diesel, 1.9 million tons of gasoline, and 700,000 tons of fuel oil.
- Iran is seeking a limited interim agreement with the United States to ease economic pressure, stabilise the situation at home, and avoid major concessions on its nuclear programme. The approach reflects a familiar playbook for the Islamic Republic: absorb pressure, avoid irreversible compromises and keep negotiations alive without shifting core positions.
- India will cut its export duties on petrol, diesel, and aviation turbine fuel (ATF) for the fortnight starting 01st Jun'26, based on average international prices of crude oil, petrol, diesel, and ATF since the last review. The duty on exports of petrol has been set at 1.5 rupees per litre, while that on diesel has been set at 13.5 rupees per litre.
- Export duties on ATF have been set at 9.5 rupees per litre. There is no change in the existing excise duty rates on petrol and diesel cleared for domestic consumption.
- China's seaborne crude oil imports fell to their lowest in almost 10 years in May, dropping to 6.36 MBpd, due to the impact of the Iran war and the closure of the Strait of Hormuz.
- The collapse in China's imports is being framed as helping Asia adjust to the loss of at least 10 MBpd of crude, but it is a serendipitous side effect rather than any altruism on Beijing's part.
- The primary driver behind the collapse in China's oil imports is the conflict in the Middle East, but the real challenge is in working out the why and how of what China is doing to adapt to the loss of as much as 10% of global crude supplies from the Iran conflict.
- According to the Energy Information Administration the US crude production remained steady at 13.7 MBpd in Mar'26. Texas crude output fell to a four-month low, while New Mexico production was unchanged. The US crude production is expected to rise as operators increase output in response to high oil prices due to the Iran war.
- Venezuela's oil exports rose to 1.25 MBpd in May'26, marking the third consecutive month of increase, driven by more cargoes to the US, India, and Europe. Under the US-supported government of interim President Rodriguez, Venezuelan crude production and exports have bounced this year as Washington eased sanctions and foreign companies expanded oil and gas projects in the OPEC nation.
War Impact on Crude Oil & Gasoil/Diesel Prices
War Impact on Gasoline, ATF & Natural Gas Prices
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:
The ongoing conflict in the Middle East, continues to weigh on global markets and keeping inflation expectations elevated. The war-driven rise in energy prices has heightened concerns about higher transportation and manufacturing costs globally, adding further pressure to already elevated inflation. At the same time, elevated crude prices continue to weigh on emerging markets and developing economies, particularly large energy-importing nations, as higher import bills and currency pressures weaken economic stability and complicate monetary policy decisions in the nearterm.
Steel:
- Domestic steel prices have moderated from recent highs.
- Steel supply chains remain largely insulated from the Middle East conflict.
- Since, the start of war steel HRC prices are up by 9.0%.
Base metals:
- Copper ended last week up by 0.5%, primarily due to widening LME-CME spread.
- Aluminum rose by 19.4% since start of war 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.
LPG Market Update - 02 June 2026
- India's LPG market saw another upward revision on 1st June 2026 , with oil marketing companies increasing commercial cylinder prices Commercial LPG prices were raised across major cities, with the 19 kg cylinder in Delhi increasing by Rs 42 to Rs 3,113.50. Similar hikes were reported nationwide, ranging from Rs 42 to Rs 53.50 per cylinder. Kolkata recorded the sharpest increase of Rs 53.50, taking prices to Rs 3,255.50, while Hyderabad and Bhubaneswar saw hikes of Rs 52 each. Mumbai's commercial LPG price rose by Rs 43.50 to Rs 3,067.50, and Chennai's rate increased by Rs 46 to Rs 3,283.00.
- In addition to commercial cylinders, oil marketing companies also increased the price of 5 kg Free Trade LPG (FTL) cylinders by Rs 11. Following the revision, the retail price of a 5 kg FTL cylinder in Delhi now stands at Rs 821.50. FTL cylinders are sold outside the subsidized domestic LPG system and are commonly used by migrant workers, temporary households, street vendors, and consumers requiring smaller LPG packs.
- For June, Saudi Aramco CPs increased further to USD 760/ton for propane and USD 820/ton for butane, reflecting continued market tightness and persistent concerns over Middle East supply security.
In contrast, Algeria's Sonatrach moved in the opposite direction, implementing substantial reductions in its June LPG benchmarks. Propane prices were cut by USD 125/ton to USD 575/ton, representing an 18% decline from May levels. Butane experienced an even sharper correction, falling by USD 270/ton to USD 610/ton, a drop of approximately 31%.
Impact Assessment of US/Israel-Iran Conflict
⚡
US / IsraelβIran War Β· Market Update
- The US crude exports reached a record high of 5.6 MBpd in May'26 due to the Middle East crisis, which increased demand from Asian and European refiners. The US and Israel's war with Iran disrupted global energy markets, causing refiners to seek alternatives to Middle Eastern supply. US crude exports surged past the previous record set in Apr'26 of 5.2 MBpd, with Asia taking 2.45 MBpd and Europe 2.4 MBpd of the barrels exported in May'26.
- According to market grapevines the Lukoil-owned Volgograd oil refinery in Russia's south has suspended oil processing since 29th May'26 due to a Ukrainian drone attack that caused fire and damages. The attack has halted the crude distillation unit CDU-1, which accounts for 40% of the plant's capacity, and stopped other units CDU-6 and CDU-5.
- The refinery processed 13.5 million metric tons of oil in 2024, accounting for 5% of total Russian refinery volume, producing 6 million tons of diesel, 1.9 million tons of gasoline, and 700,000 tons of fuel oil.
- Iran is seeking a limited interim agreement with the United States to ease economic pressure, stabilise the situation at home, and avoid major concessions on its nuclear programme. The approach reflects a familiar playbook for the Islamic Republic: absorb pressure, avoid irreversible compromises and keep negotiations alive without shifting core positions.
- India will cut its export duties on petrol, diesel, and aviation turbine fuel (ATF) for the fortnight starting 01st Jun'26, based on average international prices of crude oil, petrol, diesel, and ATF since the last review. The duty on exports of petrol has been set at 1.5 rupees per litre, while that on diesel has been set at 13.5 rupees per litre.
- Export duties on ATF have been set at 9.5 rupees per litre. There is no change in the existing excise duty rates on petrol and diesel cleared for domestic consumption.
- China's seaborne crude oil imports fell to their lowest in almost 10 years in May, dropping to 6.36 MBpd, due to the impact of the Iran war and the closure of the Strait of Hormuz.
- The collapse in China's imports is being framed as helping Asia adjust to the loss of at least 10 MBpd of crude, but it is a serendipitous side effect rather than any altruism on Beijing's part.
- The primary driver behind the collapse in China's oil imports is the conflict in the Middle East, but the real challenge is in working out the why and how of what China is doing to adapt to the loss of as much as 10% of global crude supplies from the Iran conflict.
- According to the Energy Information Administration the US crude production remained steady at 13.7 MBpd in Mar'26. Texas crude output fell to a four-month low, while New Mexico production was unchanged. The US crude production is expected to rise as operators increase output in response to high oil prices due to the Iran war.
- Venezuela's oil exports rose to 1.25 MBpd in May'26, marking the third consecutive month of increase, driven by more cargoes to the US, India, and Europe. Under the US-supported government of interim President Rodriguez, Venezuelan crude production and exports have bounced this year as Washington eased sanctions and foreign companies expanded oil and gas projects in the OPEC nation.
War Impact on Crude Oil & Gasoil/Diesel Prices
War Impact on Gasoline, ATF & Natural Gas Prices
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:
The ongoing conflict in the Middle East, continues to weigh on global markets and keeping inflation expectations elevated. The war-driven rise in energy prices has heightened concerns about higher transportation and manufacturing costs globally, adding further pressure to already elevated inflation. At the same time, elevated crude prices continue to weigh on emerging markets and developing economies, particularly large energy-importing nations, as higher import bills and currency pressures weaken economic stability and complicate monetary policy decisions in the nearterm.
Steel:
- Domestic steel prices have moderated from recent highs.
- Steel supply chains remain largely insulated from the Middle East conflict.
- Since, the start of war steel HRC prices are up by 9.0%.
Base metals:
- Copper ended last week up by 0.5%, primarily due to widening LME-CME spread.
- Aluminum rose by 19.4% since start of war 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.
LPG Market Update - 02 June 2026
- India's LPG market saw another upward revision on 1st June 2026 , with oil marketing companies increasing commercial cylinder prices Commercial LPG prices were raised across major cities, with the 19 kg cylinder in Delhi increasing by Rs 42 to Rs 3,113.50. Similar hikes were reported nationwide, ranging from Rs 42 to Rs 53.50 per cylinder. Kolkata recorded the sharpest increase of Rs 53.50, taking prices to Rs 3,255.50, while Hyderabad and Bhubaneswar saw hikes of Rs 52 each. Mumbai's commercial LPG price rose by Rs 43.50 to Rs 3,067.50, and Chennai's rate increased by Rs 46 to Rs 3,283.00.
- In addition to commercial cylinders, oil marketing companies also increased the price of 5 kg Free Trade LPG (FTL) cylinders by Rs 11. Following the revision, the retail price of a 5 kg FTL cylinder in Delhi now stands at Rs 821.50. FTL cylinders are sold outside the subsidized domestic LPG system and are commonly used by migrant workers, temporary households, street vendors, and consumers requiring smaller LPG packs.
- For June, Saudi Aramco CPs increased further to USD 760/ton for propane and USD 820/ton for butane, reflecting continued market tightness and persistent concerns over Middle East supply security.
In contrast, Algeria's Sonatrach moved in the opposite direction, implementing substantial reductions in its June LPG benchmarks. Propane prices were cut by USD 125/ton to USD 575/ton, representing an 18% decline from May levels. Butane experienced an even sharper correction, falling by USD 270/ton to USD 610/ton, a drop of approximately 31%.
Impact Assessment of US/Israel-Iran Conflict
⚡
US / IsraelβIran War Β· Market Update
- The US crude exports reached a record high of 5.6 MBpd in May'26 due to the Middle East crisis, which increased demand from Asian and European refiners. The US and Israel's war with Iran disrupted global energy markets, causing refiners to seek alternatives to Middle Eastern supply. US crude exports surged past the previous record set in Apr'26 of 5.2 MBpd, with Asia taking 2.45 MBpd and Europe 2.4 MBpd of the barrels exported in May'26.
- According to market grapevines the Lukoil-owned Volgograd oil refinery in Russia's south has suspended oil processing since 29th May'26 due to a Ukrainian drone attack that caused fire and damages. The attack has halted the crude distillation unit CDU-1, which accounts for 40% of the plant's capacity, and stopped other units CDU-6 and CDU-5.
- The refinery processed 13.5 million metric tons of oil in 2024, accounting for 5% of total Russian refinery volume, producing 6 million tons of diesel, 1.9 million tons of gasoline, and 700,000 tons of fuel oil.
- Iran is seeking a limited interim agreement with the United States to ease economic pressure, stabilise the situation at home, and avoid major concessions on its nuclear programme. The approach reflects a familiar playbook for the Islamic Republic: absorb pressure, avoid irreversible compromises and keep negotiations alive without shifting core positions.
- India will cut its export duties on petrol, diesel, and aviation turbine fuel (ATF) for the fortnight starting 01st Jun'26, based on average international prices of crude oil, petrol, diesel, and ATF since the last review. The duty on exports of petrol has been set at 1.5 rupees per litre, while that on diesel has been set at 13.5 rupees per litre.
- Export duties on ATF have been set at 9.5 rupees per litre. There is no change in the existing excise duty rates on petrol and diesel cleared for domestic consumption.
- China's seaborne crude oil imports fell to their lowest in almost 10 years in May, dropping to 6.36 MBpd, due to the impact of the Iran war and the closure of the Strait of Hormuz.
- The collapse in China's imports is being framed as helping Asia adjust to the loss of at least 10 MBpd of crude, but it is a serendipitous side effect rather than any altruism on Beijing's part.
- The primary driver behind the collapse in China's oil imports is the conflict in the Middle East, but the real challenge is in working out the why and how of what China is doing to adapt to the loss of as much as 10% of global crude supplies from the Iran conflict.
- According to the Energy Information Administration the US crude production remained steady at 13.7 MBpd in Mar'26. Texas crude output fell to a four-month low, while New Mexico production was unchanged. The US crude production is expected to rise as operators increase output in response to high oil prices due to the Iran war.
- Venezuela's oil exports rose to 1.25 MBpd in May'26, marking the third consecutive month of increase, driven by more cargoes to the US, India, and Europe. Under the US-supported government of interim President Rodriguez, Venezuelan crude production and exports have bounced this year as Washington eased sanctions and foreign companies expanded oil and gas projects in the OPEC nation.
War Impact on Crude Oil & Gasoil/Diesel Prices
War Impact on Gasoline, ATF & Natural Gas Prices
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:
The ongoing conflict in the Middle East, continues to weigh on global markets and keeping inflation expectations elevated. The war-driven rise in energy prices has heightened concerns about higher transportation and manufacturing costs globally, adding further pressure to already elevated inflation. At the same time, elevated crude prices continue to weigh on emerging markets and developing economies, particularly large energy-importing nations, as higher import bills and currency pressures weaken economic stability and complicate monetary policy decisions in the nearterm.
Steel:
- Domestic steel prices have moderated from recent highs.
- Steel supply chains remain largely insulated from the Middle East conflict.
- Since, the start of war steel HRC prices are up by 9.0%.
Base metals:
- Copper ended last week up by 0.5%, primarily due to widening LME-CME spread.
- Aluminum rose by 19.4% since start of war 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.
LPG Market Update - 02 June 2026
- India's LPG market saw another upward revision on 1st June 2026 , with oil marketing companies increasing commercial cylinder prices Commercial LPG prices were raised across major cities, with the 19 kg cylinder in Delhi increasing by Rs 42 to Rs 3,113.50. Similar hikes were reported nationwide, ranging from Rs 42 to Rs 53.50 per cylinder. Kolkata recorded the sharpest increase of Rs 53.50, taking prices to Rs 3,255.50, while Hyderabad and Bhubaneswar saw hikes of Rs 52 each. Mumbai's commercial LPG price rose by Rs 43.50 to Rs 3,067.50, and Chennai's rate increased by Rs 46 to Rs 3,283.00.
- In addition to commercial cylinders, oil marketing companies also increased the price of 5 kg Free Trade LPG (FTL) cylinders by Rs 11. Following the revision, the retail price of a 5 kg FTL cylinder in Delhi now stands at Rs 821.50. FTL cylinders are sold outside the subsidized domestic LPG system and are commonly used by migrant workers, temporary households, street vendors, and consumers requiring smaller LPG packs.
- For June, Saudi Aramco CPs increased further to USD 760/ton for propane and USD 820/ton for butane, reflecting continued market tightness and persistent concerns over Middle East supply security.
In contrast, Algeria's Sonatrach moved in the opposite direction, implementing substantial reductions in its June LPG benchmarks. Propane prices were cut by USD 125/ton to USD 575/ton, representing an 18% decline from May levels. Butane experienced an even sharper correction, falling by USD 270/ton to USD 610/ton, a drop of approximately 31%.
Impact Assessment of US/Israel-Iran Conflict
⚡
US / IsraelβIran War Β· Market Update
- India will cut its export duties on petrol, diesel, and aviation turbine fuel (ATF) for the fortnight starting June 1, based on average international prices of crude oil, petrol, diesel, and ATF since the last review. The duty on exports of petrol has been set at 1.5 rupees per litre, while that on diesel has been set at 13.5 rupees per litre.
- Export duties on ATF have been set at 9.5 rupees per litre. There is no change in the existing excise duty rates on petrol and diesel cleared for domestic consumption.
- China’s seaborne crude oil imports fell to their lowest in almost 10 years in May, dropping to 6.36 MBpd, due to the impact of the Iran war and the closure of the Strait of Hormuz.
- The collapse in China’s imports is being framed as helping Asia adjust to the loss of at least 10 MBpd of crude, but it is a serendipitous side effect rather than any altruism on Beijing’s part.
- The primary driver behind the collapse in China’s oil imports is the conflict in the Middle East, but the real challenge is in working out the why and how of what China is doing to adapt to the loss of as much as 10% of global crude supplies from the Iran conflict.
- According to the Energy Information Administration the US crude production remained steady at 13.7 MBpd in Mar’26. Texas crude output fell to a four-month low, while New Mexico production was unchanged. The US crude production is expected to rise as operators increase output in response to high oil prices due to the Iran war.
War Impact on Crude Oil & Gasoil/Diesel Prices
War Impact on Gasoline, ATF & Natural Gas Prices
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:
The ongoing conflict in the Middle East, continues to weigh on global markets and keeping inflation expectations elevated. The war-driven rise in energy prices has heightened concerns about higher transportation and manufacturing costs globally, adding further pressure to already elevated inflation. At the same time, elevated crude prices continue to weigh on emerging markets and developing economies, particularly large energy-importing nations, as higher import bills and currency pressures weaken economic stability and complicate monetary policy decisions in the nearterm.
Steel:
- Domestic steel prices have moderated from recent highs.
- Steel supply chains remain largely insulated from the Middle East conflict.
- Since, the start of war steel HRC prices are up by 9.0%.
Base metals:
- Copper ended last week up by 0.5%, primarily due to widening LME-CME spread.
- Aluminum rose by 19.4% since start of war 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.
LPG Market Update – 01 June 2026
- India’s LPG market saw another upward revision on 1st June 2026 , with oil marketing companies increasing commercial cylinder prices Commercial LPG prices were raised across major cities, with the 19 kg cylinder in Delhi increasing by Rs 42 to Rs 3,113.50. Similar hikes were reported nationwide, ranging from Rs 42 to Rs 53.50 per cylinder. Kolkata recorded the sharpest increase of Rs 53.50, taking prices to Rs 3,255.50, while Hyderabad and Bhubaneswar saw hikes of Rs 52 each. Mumbai’s commercial LPG price rose by Rs 43.50 to Rs 3,067.50, and Chennai’s rate increased by Rs 46 to Rs 3,283.00.
- In addition to commercial cylinders, oil marketing companies also increased the price of 5 kg Free Trade LPG (FTL) cylinders by Rs 11. Following the revision, the retail price of a 5 kg FTL cylinder in Delhi now stands at Rs 821.50. FTL cylinders are sold outside the subsidized domestic LPG system and are commonly used by migrant workers, temporary households, street vendors, and consumers requiring smaller LPG packs.
Impact Assessment of US/Israel-Iran Conflict
⚡
US / IsraelβIran War Β· Market Update
- The US crude oil inventories fell for a sixth straight week last week, according to American Petroleum Institute data released on 27th May'26. Crude stocks decreased by 2.8 mln bbl, while gasoline inventories fell by 3.2 mln bbl and distillate inventories rose by 1.1 mln bbl compared to the previous week.
- On 27th May'26, the US military shot down four Iranian attack drones and struck a ground control station in Bandar Abbas, following an Iranian drone operation posing a threat to US forces and commercial shipping in the Strait of Hormuz.
- A cargo of US Strategic Petroleum Reserve oil headed to California for the first time ever, highlighting the redrawing of trade flows and shipping routes due to the Iran war. California, once a top oil-producing state, has become more dependent on crude imports, including from the Middle East.
- About 0.46 bbl of Bayou Choctaw Sweet crude went to Chevron's Richmond refinery and another 0.05 bbl to its El Segundo refinery, while a supertanker unloaded the cargo to two smaller ships that took it to the refineries in California.
- According to PPAC data, Indian refiners' crude throughput fell 8.9% month-on-month in April to 5.23 MBpd, Indian Oil Corp, Bharat Petroleum Corp Ltd, Hindustan Petroleum Corp Ltd, Mangalore Refinery and Petrochemicals Ltd, and Reliance Industries Ltd all experienced drops in production.
- CPCL's CBR refinery is decommissioned due to limitations in meeting product specifications with the existing configuration. .
- Iran accused the US of violating a ceasefire by striking targets near the Strait of Hormuz, complicating efforts to end the war. Israel continued to bomb Lebanon, further straining peace efforts.
- The war has caused an unprecedented oil supply shock, pushing up the costs of fuel, fertiliser, and food. Iran and the US have made progress on a memorandum of understanding that would lead to further negotiations over a final agreement, but key issues remain unresolved, including Iran's nuclear program and the conflict in Lebanon.
- A cargo of crude oil from the US Strategic Petroleum Reserve is heading to the Philippines, the first shipment to Asia since Nov'22. The shipment is part of a coordinated effort by the International Energy Agency to release 400 mln bbl of oil to quell rising prices, as the Iran war upends global supplies and the Strait of Hormuz remains largely closed.
War Impact on Crude Oil & Gasoil/Diesel Prices
War Impact on Gasoline, ATF & Natural Gas Prices
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:
The ongoing conflict in the Middle East, continues to weigh on global markets and keeping inflation expectations elevated as crude oil prices remained above USD 100/Barrel amid persistent supply disruption concerns. The war-driven rise in energy prices has heightened concerns about higher transportation and manufacturing costs globally, adding further pressure to already elevated inflation. At the same time, elevated crude prices continue to weigh on emerging markets and developing economies, particularly large energy-importing nations, as higher import bills and currency pressures weaken economic stability and complicate monetary policy decisions in the near term.
Steel:
- Domestic steel prices have moderated from recent highs.
- Steel supply chains remain largely insulated from the Middle East conflict.
- Since, the start of war steel HRC prices are up by 9.0%.
Base metals:
- Copper ended last week up by 1.1%, primarily due to widening CME-LME spread.
- Aluminum rose by 19% since start of war 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.
LPG Market Update - 26 May 2026
- Saudi Aramco increased its June 2026 CPs to USD 760/ton for propane and USD 820/ton for butane, compared to USD 750/ton and USD 800/ton in May, showing that the global LPG market remains tight. The rise mainly reflects ongoing geopolitical tensions in the Gulf, with disruptions around Hormuz and Saudi export infrastructure continuing to keep supply concerns elevated. Butane prices saw stronger support from steady Asian petrochemical demand and better gasoline blending margins. Even with softer crude prices, the latest CPs suggest that supply security remains the key factor driving LPG prices.
- On 25 May 2026, the Government of India introduced an amendment to LPG supply regulations that makes the shift from LPG to PNG more flexible for consumers. Households taking a PNG connection can either surrender their LPG connection within 30 days or retain future eligibility through a transfer voucher if they later move to a non PNG area.
Auto DraftImpact Assessment of US/Israel-Iran Conflict
⚡
US / IsraelβIran War Β· Market Update
- The US crude oil inventories fell for a sixth straight week last week, according to American Petroleum Institute data released on 27th May'26. Crude stocks decreased by 2.8 mln bbl, while gasoline inventories fell by 3.2 mln bbl and distillate inventories rose by 1.1 mln bbl compared to the previous week.
- On 27th May'26, the US military shot down four Iranian attack drones and struck a ground control station in Bandar Abbas, following an Iranian drone operation posing a threat to US forces and commercial shipping in the Strait of Hormuz.
- A cargo of US Strategic Petroleum Reserve oil headed to California for the first time ever, highlighting the redrawing of trade flows and shipping routes due to the Iran war. California, once a top oil-producing state, has become more dependent on crude imports, including from the Middle East.
- About 0.46 bbl of Bayou Choctaw Sweet crude went to Chevron's Richmond refinery and another 0.05 bbl to its El Segundo refinery, while a supertanker unloaded the cargo to two smaller ships that took it to the refineries in California.
- According to PPAC data, Indian refiners' crude throughput fell 8.9% month-on-month in April to 5.23 MBpd, Indian Oil Corp, Bharat Petroleum Corp Ltd, Hindustan Petroleum Corp Ltd, Mangalore Refinery and Petrochemicals Ltd, and Reliance Industries Ltd all experienced drops in production.
- CPCL's CBR refinery is decommissioned due to limitations in meeting product specifications with the existing configuration. .
- Iran accused the US of violating a ceasefire by striking targets near the Strait of Hormuz, complicating efforts to end the war. Israel continued to bomb Lebanon, further straining peace efforts.
- The war has caused an unprecedented oil supply shock, pushing up the costs of fuel, fertiliser, and food. Iran and the US have made progress on a memorandum of understanding that would lead to further negotiations over a final agreement, but key issues remain unresolved, including Iran's nuclear program and the conflict in Lebanon.
- A cargo of crude oil from the US Strategic Petroleum Reserve is heading to the Philippines, the first shipment to Asia since Nov'22. The shipment is part of a coordinated effort by the International Energy Agency to release 400 mln bbl of oil to quell rising prices, as the Iran war upends global supplies and the Strait of Hormuz remains largely closed.
War Impact on Crude Oil & Gasoil/Diesel Prices
War Impact on Gasoline, ATF & Natural Gas Prices
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:
The ongoing conflict in the Middle East, continues to weigh on global markets and keeping inflation expectations elevated as crude oil prices remained above USD 100/Barrel amid persistent supply disruption concerns. The war-driven rise in energy prices has heightened concerns about higher transportation and manufacturing costs globally, adding further pressure to already elevated inflation. At the same time, elevated crude prices continue to weigh on emerging markets and developing economies, particularly large energy-importing nations, as higher import bills and currency pressures weaken economic stability and complicate monetary policy decisions in the near term.
Steel:
- Domestic steel prices have moderated from recent highs.
- Steel supply chains remain largely insulated from the Middle East conflict.
- Since, the start of war steel HRC prices are up by 9.0%.
Base metals:
- Copper ended last week up by 1.1%, primarily due to widening CME-LME spread.
- Aluminum rose by 19% since start of war 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.
LPG Market Update - 26 May 2026
- Saudi Aramco increased its June 2026 CPs to USD 760/ton for propane and USD 820/ton for butane, compared to USD 750/ton and USD 800/ton in May, showing that the global LPG market remains tight. The rise mainly reflects ongoing geopolitical tensions in the Gulf, with disruptions around Hormuz and Saudi export infrastructure continuing to keep supply concerns elevated. Butane prices saw stronger support from steady Asian petrochemical demand and better gasoline blending margins. Even with softer crude prices, the latest CPs suggest that supply security remains the key factor driving LPG prices.
- On 25 May 2026, the Government of India introduced an amendment to LPG supply regulations that makes the shift from LPG to PNG more flexible for consumers. Households taking a PNG connection can either surrender their LPG connection within 30 days or retain future eligibility through a transfer voucher if they later move to a non PNG area.