Crude Oil 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. 

Strategic Petroleum Release

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — 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 — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — 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.

Supply Analysis


Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 1.35–1.90 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.

• 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).

Price Outlook

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.

Metals & Energy Market Update – 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 Iran’s 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 ’26, 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 offtake—especially auto—are suppressing any upside momentum.

LPG Market Update

IOCL Price Update — 1 May 2026

• Unchanged: Retail Petrol, Diesel, Domestic LPG (14.2 kg @ Rs 913 in Delhi), ATF for domestic airlines, and PDS Kerosene — covering -80% of petroleum products.
  Revised upward:
  •    19 kg Commercial LPG: +Rs 993 (Delhi: Rs 2,078.50 → Rs 3,071.50; Mumbai: Rs 2,031 → Rs 3,024)
  •    5 kg Free Trade LPG (FTL): +Rs 261 per cylinder.

Crude Oil 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.
• Hopes for a peace deal on Iran faded on 12th May'26 after Donald Trump said ​a ceasefire with Iran was "on life support" as Tehran rejected a US proposal to end the conflict and stuck to a list of ‌demands the US president described as "garbage".
• Iran has called for an end to the war on all fronts, including Lebanon, where US ally Israel is fighting Iran-backed Hezbollah militants. Tehran also emphasized its sovereignty over the Strait of Hormuz, demanded compensation for war damage, and an end to the US naval blockade, among other conditions.
• Market grapevine indicates OPEC oil output fell to the lowest in more than two decades in Apr'26 due to the U.S.-Israeli war with Iran, which closed the Strait of Hormuz and forced export cuts. Output dropped by 0.83 MBpd to 20.04 MBpd, with Kuwait experiencing the group's biggest production decline. 
• China’s crude oil imports fell 20% YoY to 7.7 MBpd in Apr'26 (with seaborne imports at 8.03 MBpd, the lowest since Jul'22), while refined product exports dropped to 0.75 MBpd and natural gas imports declined to 1.1 MBpd amid Middle East supply disruptions.
• Despite lower imports, crude inventories increased by 0.57 MBpd (17 mln bbl build) in Apr'26, while year-to-date imports remained slightly higher at 9.1 MBpd (increased by 1.3% YoY).

Strategic Petroleum Release

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — 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 — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — 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.

Supply Analysis


Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 1.35–1.90 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.

• 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).

Price Outlook

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.

Metals & Energy Market Update – 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 Iran’s 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 ’26, 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 offtake—especially auto—are suppressing any upside momentum.

LPG Market Update

08th Indian-flagged LPG vessel has transited the Strait of Hormuz and reached India

India’s LPG import slump in March'26 signals Gulf disruption impact, triggers strategic shift toward US supply

• India’s LPG import profile shifted sharply in March, with total volumes declining 31.5% MoM to 1,462 KT (down 674 KT), driven by a steep 59.9% drop in Gulf supplies (ex-Iran) to 788 KT (-1,177 KT), reducing their share from 92.0% to 53.9% amid disruptions around the Strait of Hormuz.
• This was partially offset by a surge in imports from the United States, which rose 374% MoM to 533 KT (+421 KT), lifting its share to 36.5%, alongside incremental volumes from Iran (42 KT, +139%), the Russian Federation (32 KT), Indonesia (23 KT, +27.9%), and Argentina (23 KT).
• Despite this rebalancing, the shift toward long-haul cargoes implies higher freight intensity and longer supply chains, reinforcing near-term tightness and upward pressure on delivered LPG costs.

IOCL Price Update — 1 May 2026

• Unchanged: Retail Petrol, Diesel, Domestic LPG (14.2 kg @ Rs 913 in Delhi), ATF for domestic airlines, and PDS Kerosene — covering -80% of petroleum products.
  Revised upward:
  •    19 kg Commercial LPG: +Rs 993 (Delhi: Rs 2,078.50 → Rs 3,071.50; Mumbai: Rs 2,031 → Rs 3,024)
  •    5 kg Free Trade LPG (FTL): +Rs 261 per cylinder.

Crude Oil Market Update

• Hopes for a peace deal on Iran faded on 12th May'26 after Donald Trump said ​a ceasefire with Iran was "on life support" as Tehran rejected a US proposal to end the conflict and stuck to a list of ‌demands the US president described as "garbage".
• Iran has called for an end to the war on all fronts, including Lebanon, where US ally Israel is fighting Iran-backed Hezbollah militants. Tehran also emphasized its sovereignty over the Strait of Hormuz, demanded compensation for war damage, and an end to the US naval blockade, among other conditions.
• Market grapevine indicates OPEC oil output fell to the lowest in more than two decades in Apr'26 due to the U.S.-Israeli war with Iran, which closed the Strait of Hormuz and forced export cuts. Output dropped by 0.83 MBpd to 20.04 MBpd, with Kuwait experiencing the group's biggest production decline. 
• China’s crude oil imports fell 20% YoY to 7.7 MBpd in Apr'26 (with seaborne imports at 8.03 MBpd, the lowest since Jul'22), while refined product exports dropped to 0.75 MBpd and natural gas imports declined to 1.1 MBpd amid Middle East supply disruptions.
• Despite lower imports, crude inventories increased by 0.57 MBpd (17 mln bbl build) in Apr'26, while year-to-date imports remained slightly higher at 9.1 MBpd (increased by 1.3% YoY).
• The US Treasury announced sanctions against 10 individuals and companies, including several in China and Hong Kong, for aiding Iran's efforts to secure weapons and raw materials for its Shahed drones and ballistic missiles.
• The sanctions come as efforts to end the war with Iran have stalled and before President Trump's meeting with Chinese President Xi Jinping.
• Singapore’s total onshore crude oil products stocks fell to 44.83 mln bbl (lowest since July 2025), with middle distillates down by 0.84 mln bbl to 10.08 mln bbl and residual fuel inventories at 19.88 mln bbl, near a one-year low due to disrupted Middle East supply.

Strategic Petroleum Release

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — 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 — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — 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.

Supply Analysis


Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 1.35–1.90 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.

• 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).

Price Outlook

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.

Metals & Energy Market Update – 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 Iran’s 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 ’26, ending at ~INR 57,850/ton (BigMint).
• Initial war-driven risk premium has been partially unwound.

Base metals:

• Copper ended last week up by 3.3%, primarily due to supply risks linked to sulphuric acid.
• Aluminum fell by 0.7% despite earlier gains linked to Gulf region supply disruptions — 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 offtake—especially auto—are suppressing any upside momentum.

LPG Market Update

08th Indian-flagged LPG vessel has transited the Strait of Hormuz and reached India

India’s LPG import slump in March'26 signals Gulf disruption impact, triggers strategic shift toward US supply

• India’s LPG import profile shifted sharply in March, with total volumes declining 31.5% MoM to 1,462 KT (down 674 KT), driven by a steep 59.9% drop in Gulf supplies (ex-Iran) to 788 KT (-1,177 KT), reducing their share from 92.0% to 53.9% amid disruptions around the Strait of Hormuz.
• This was partially offset by a surge in imports from the United States, which rose 374% MoM to 533 KT (+421 KT), lifting its share to 36.5%, alongside incremental volumes from Iran (42 KT, +139%), the Russian Federation (32 KT), Indonesia (23 KT, +27.9%), and Argentina (23 KT).
• Despite this rebalancing, the shift toward long-haul cargoes implies higher freight intensity and longer supply chains, reinforcing near-term tightness and upward pressure on delivered LPG costs.

IOCL Price Update — 1 May 2026

• Unchanged: Retail Petrol, Diesel, Domestic LPG (14.2 kg @ Rs 913 in Delhi), ATF for domestic airlines, and PDS Kerosene — covering -80% of petroleum products.
  Revised upward:
  •    19 kg Commercial LPG: +Rs 993 (Delhi: Rs 2,078.50 → Rs 3,071.50; Mumbai: Rs 2,031 → Rs 3,024)
  •    5 kg Free Trade LPG (FTL): +Rs 261 per cylinder.

Crude Oil Market Update

• Singapore’s total onshore crude oil products stocks fell to 44.83 mln bbl (lowest since July 2025), with middle distillates down by 0.84 mln bbl to 10.08 mln bbl and residual fuel inventories at 19.88 mln bbl, near a one-year low due to disrupted Middle East supply.
• Gasoline stocks also declined to a 19-week low as exports (~4 mln bbl) far exceeded imports (~2.4 mln bbl), while diesel imports surged and jet fuel net exports rose 91% WoW to 0.37 mln bbl.
• Iran is reviewing a US peace proposal that would end the war, but key issues such as Iran's nuclear program and control of the Strait of Hormuz remain unresolved. An agreement could lead to discussions on unblocking shipping through the strait, lifting US sanctions on Iran, and setting curbs on Iran's nuclear program.
• Saudi Arabia reduced the official selling price (OSP) of its Jun'26 Arab Light crude oil to Asia by 4 USD per bbl to 15.50 USD above the Oman/Dubai average.
• The company also lowered the Arab Light OSP for Northwest Europe by 2 USD per bbl and kept the price for North American customers unchanged.

Strategic Petroleum Release

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — 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 — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — 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.

Supply Analysis


Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 1.35–1.90 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.

• 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).

Price Outlook

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.

Metals & Energy Market Update – 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 Iran’s 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 ’26, ending at ~INR 57,850/ton (BigMint).
• Initial war-driven risk premium has been partially unwound.

Base metals:

• Copper ended last week up by 3.3%, primarily due to supply risks linked to sulphuric acid.
• Aluminum fell by 0.7% despite earlier gains linked to Gulf region supply disruptions — 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 offtake—especially auto—are suppressing any upside momentum.

LPG Market Update

08th Indian-flagged LPG vessel has transited the Strait of Hormuz and reached India

India’s LPG import slump in March'26 signals Gulf disruption impact, triggers strategic shift toward US supply

• India’s LPG import profile shifted sharply in March, with total volumes declining 31.5% MoM to 1,462 KT (down 674 KT), driven by a steep 59.9% drop in Gulf supplies (ex-Iran) to 788 KT (-1,177 KT), reducing their share from 92.0% to 53.9% amid disruptions around the Strait of Hormuz.
• This was partially offset by a surge in imports from the United States, which rose 374% MoM to 533 KT (+421 KT), lifting its share to 36.5%, alongside incremental volumes from Iran (42 KT, +139%), the Russian Federation (32 KT), Indonesia (23 KT, +27.9%), and Argentina (23 KT).
• Despite this rebalancing, the shift toward long-haul cargoes implies higher freight intensity and longer supply chains, reinforcing near-term tightness and upward pressure on delivered LPG costs.

IOCL Price Update — 1 May 2026

• Unchanged: Retail Petrol, Diesel, Domestic LPG (14.2 kg @ Rs 913 in Delhi), ATF for domestic airlines, and PDS Kerosene — covering -80% of petroleum products.
  Revised upward:
  •    19 kg Commercial LPG: +Rs 993 (Delhi: Rs 2,078.50 → Rs 3,071.50; Mumbai: Rs 2,031 → Rs 3,024)
  •    5 kg Free Trade LPG (FTL): +Rs 261 per cylinder.

Crude Oil Market Update

• Iran is reviewing a US peace proposal that would end the war, but key issues such as Iran's nuclear program and control of the Strait of Hormuz remain unresolved. An agreement could lead to discussions on unblocking shipping through the strait, lifting US sanctions on Iran, and setting curbs on Iran's nuclear program.
• Saudi Arabia reduced the official selling price (OSP) of its Jun'26 Arab Light crude oil to Asia by 4 USD per bbl to 15.50 USD above the Oman/Dubai average.
• The company also lowered the Arab Light OSP for Northwest Europe by 2 USD per bbl and kept the price for North American customers unchanged.
• Iran hit several ships in the Strait of Hormuz, setting a UAE oil port ablaze and provoking a response from the US military, which destroyed six Iranian small boats and intercepted missiles and drones. 
• The UAE said its air defenses were engaging missile and drone threats on 05th May'26 evening, as firefighters battled a blaze at a major oil industry zone following a drone attack originating from Iran.
• The Gulf Arab state's foreign ministry said the attacks posed a direct threat to the country's security and reserved the right to respond.
• Iranian state media cited a senior military official saying Iran had no plan to target the UAE, while the UAE's defence ministry said it had intercepted three Iranian missiles over its territorial waters and a fourth crashed into the sea.

Strategic Petroleum Release

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — 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 — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — 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.

Supply Analysis


Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 1.35–1.90 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.

• 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).

Price Outlook

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.

Metals & Energy Market Update – Geopolitical Context (Iran Conflict)

Geopolitical backdrop: The U.S. is expected to reject Iran’s latest peace proposal, extending uncertainty in the region and sustaining volatility across commodities.

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 ’26, ending at ~INR 57,850/ton (BigMint).
• Initial war-driven risk premium has been partially unwound.

Base metals:

• Copper ended last week down ~2.5%, reflecting deteriorating risk sentiment.
• Aluminum fell ~3% despite earlier gains linked to Gulf region supply disruptions — 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 downward pressure.
• Stronger U.S. yields and weak industrial offtake—especially auto—are suppressing any upside momentum.

LPG Market Update

08th Indian-flagged LPG vessel has transited the Strait of Hormuz and reached India

India’s LPG import slump in March'26 signals Gulf disruption impact, triggers strategic shift toward US supply

• India’s LPG import profile shifted sharply in March, with total volumes declining 31.5% MoM to 1,462 KT (down 674 KT), driven by a steep 59.9% drop in Gulf supplies (ex-Iran) to 788 KT (-1,177 KT), reducing their share from 92.0% to 53.9% amid disruptions around the Strait of Hormuz.
• This was partially offset by a surge in imports from the United States, which rose 374% MoM to 533 KT (+421 KT), lifting its share to 36.5%, alongside incremental volumes from Iran (42 KT, +139%), the Russian Federation (32 KT), Indonesia (23 KT, +27.9%), and Argentina (23 KT).
• Despite this rebalancing, the shift toward long-haul cargoes implies higher freight intensity and longer supply chains, reinforcing near-term tightness and upward pressure on delivered LPG costs.

IOCL Price Update — 1 May 2026

• Unchanged: Retail Petrol, Diesel, Domestic LPG (14.2 kg @ Rs 913 in Delhi), ATF for domestic airlines, and PDS Kerosene — covering -80% of petroleum products.
  Revised upward:
  •    19 kg Commercial LPG: +Rs 993 (Delhi: Rs 2,078.50 → Rs 3,071.50; Mumbai: Rs 2,031 → Rs 3,024)
  •    5 kg Free Trade LPG (FTL): +Rs 261 per cylinder.

Crude Oil Market Update

• API report released on 06th Apr'26 estimated that the US weekly crude stocks fell by 8.1 mln bbl and Cushing stocks fell by 1.0 mln bbl. At the crude products front, gasoline stocks were decreased by 6.1 mln bbl and distillates stocks fell by 4.6 mln bbl.
• The EIA’s weekly crude report is set to be released later in the session, with market participants closely monitoring changes in crude and distillate inventories, as well as overall demand for crude products and distillates.
• Saudi Arabia reduced the official selling price (OSP) of its Jun'26 Arab Light crude oil to Asia by 4 USD per bbl to 15.50 USD above the Oman/Dubai average.
• The company also lowered the Arab Light OSP for Northwest Europe by 2 USD per bbl and kept the price for North American customers unchanged.
• Iran hit several ships in the Strait of Hormuz, setting a UAE oil port ablaze and provoking a response from the US military, which destroyed six Iranian small boats and intercepted missiles and drones. 
• The UAE said its air defenses were engaging missile and drone threats on 05th May'26 evening, as firefighters battled a blaze at a major oil industry zone following a drone attack originating from Iran.
• The Gulf Arab state's foreign ministry said the attacks posed a direct threat to the country's security and reserved the right to respond.
• Iranian state media cited a senior military official saying Iran had no plan to target the UAE, while the UAE's defence ministry said it had intercepted three Iranian missiles over its territorial waters and a fourth crashed into the sea.

Strategic Petroleum Release

IEA Region-wise Release Breakdown

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — 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 — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — 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.

Supply Analysis


Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 1.35–1.90 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.

• 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).

Price Outlook

Brent Crude 1M Futures are expected to trade in a range of 90 USD/bbl to 110 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.

Metals & Energy Market Update – Geopolitical Context (Iran Conflict)

Geopolitical backdrop: The U.S. is expected to reject Iran’s latest peace proposal, extending uncertainty in the region and sustaining volatility across commodities.

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 ’26, ending at ~INR 57,850/ton (BigMint).
• Initial war-driven risk premium has been partially unwound.

Base metals:

• Copper ended last week down ~2.5%, reflecting deteriorating risk sentiment.
• Aluminum fell ~3% despite earlier gains linked to Gulf region supply disruptions — 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 downward pressure.
• Stronger U.S. yields and weak industrial offtake—especially auto—are suppressing any upside momentum.

LPG Market Update

08th Indian-flagged LPG vessel has transited the Strait of Hormuz and reached India

India’s LPG import slump in March'26 signals Gulf disruption impact, triggers strategic shift toward US supply

• India’s LPG import profile shifted sharply in March, with total volumes declining 31.5% MoM to 1,462 KT (down 674 KT), driven by a steep 59.9% drop in Gulf supplies (ex-Iran) to 788 KT (-1,177 KT), reducing their share from 92.0% to 53.9% amid disruptions around the Strait of Hormuz.
• This was partially offset by a surge in imports from the United States, which rose 374% MoM to 533 KT (+421 KT), lifting its share to 36.5%, alongside incremental volumes from Iran (42 KT, +139%), the Russian Federation (32 KT), Indonesia (23 KT, +27.9%), and Argentina (23 KT).
• Despite this rebalancing, the shift toward long-haul cargoes implies higher freight intensity and longer supply chains, reinforcing near-term tightness and upward pressure on delivered LPG costs.

IOCL Price Update — 1 May 2026

• Unchanged: Retail Petrol, Diesel, Domestic LPG (14.2 kg @ Rs 913 in Delhi), ATF for domestic airlines, and PDS Kerosene — covering -80% of petroleum products.
  Revised upward:
  •    19 kg Commercial LPG: +Rs 993 (Delhi: Rs 2,078.50 → Rs 3,071.50; Mumbai: Rs 2,031 → Rs 3,024)
  •    5 kg Free Trade LPG (FTL): +Rs 261 per cylinder.

Crude Oil Market Update

• Iran hit several ships in the Strait of Hormuz, setting a UAE oil port ablaze and provoking a response from the US military, which destroyed six Iranian small boats and intercepted missiles and drones. 
• The UAE said its air defenses were engaging missile and drone threats on 05th May'26 evening, as firefighters battled a blaze at a major oil industry zone following a drone attack originating from Iran.
• The Gulf Arab state's foreign ministry said the attacks posed a direct threat to the country's security and reserved the right to respond.
• Iranian state media cited a senior military official saying Iran had no plan to target the UAE, while the UAE's defence ministry said it had intercepted three Iranian missiles over its territorial waters and a fourth crashed into the sea.
• The US President Trump announced the US would assist ships stranded in the Strait of Hormuz, but the lack of a US-Iran peace deal kept the market supported.
• The OPEC+ group of crude oil exporters agreed to increase output for a third straight month in Jun'26 by 0.19 MBpd, but the decision is largely meaningless due to the ongoing closure of the Strait of Hormuz.
• The remaining members of OPEC+ are signalling that they will continue without UAE, showing that the group remains relevant and most likely believes it will continue to act as a balancing force between supply and demand.

SPR / IEA

IEA member nations have agreed to a coordinated release of 400 mln bbl — the largest emergency SPR release since the IEA was founded after the 1973 Oil Crisis. The US, under the Trump administration, is contributing 172 mln bbl structured as loans to companies with repayment including a premium.

Deliveries are expected to begin reaching the market by the end of next week and will continue over approximately 120 days. The first batch of 86 mln bbl has already been opened for bidding. Japan will released 80 mln bbl beginning 16th Mar'26.

IEA Region-wise Release Breakdown

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — 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 — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — 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.

Supply Analysis


Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 1.35–1.90 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.

• Scenario 1 (Preferred): Exchange of attacks between US/Israel and Iran continuing, leading to severe/significant/complete disruptions of crude oil and its products trade through the Strait of Hormuz, severely impacting Iraq's and Kuwait's crude oil production over the next 3 to 6 months. Full-year 2026 deficit: −1.90 MBpd. AMJ quarter most acute at −4.50 MBpd.
• Scenario 2 (Alternate): Partial disruptions of crude oil trade through the Strait of Hormuz, with Iran not targeting ships and oil tankers moving toward China, India, and select Asian nations outside the Western alliance. Full-year 2026 deficit: −1.35 MBpd. Balance returns to flat by OND '26.

Economic Updates

• On the US front, US retail sales recorded a solid rebound in Feb'26, rising 0.6% MoM and 3.7% on YoY, marking the strongest gain in seven months, supported by a recovery in motor vehicle purchases and seasonal factors. Core retail sales also came in firm at 0.5% MoM, indicating underlying consumption strength, with higher tax refunds playing a key role in sustaining household spending during the period.
• The US manufacturing activity continued to expand, with ISM PMI rising to 52.7 in March, its highest level since Aug'22. That said, the improvement was partly driven by slower supplier deliveries, reflecting supply chain disruptions rather than demand strength, particularly amid shipping constraints and trade frictions. This has also led to a sharp rise in input cost pressures, with the prices paid index jumping significantly, signaling building inflation at the producer level.

Price Outlook

Brent Crude 1M Futures are expected to trade in a range of 90 USD/bbl to 110 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.

LPG Market Update

08th Indian-flagged LPG vessel has transited the Strait of Hormuz and reached India

India’s LPG import slump in March'26 signals Gulf disruption impact, triggers strategic shift toward US supply

• India’s LPG import profile shifted sharply in March, with total volumes declining 31.5% MoM to 1,462 KT (down 674 KT), driven by a steep 59.9% drop in Gulf supplies (ex-Iran) to 788 KT (-1,177 KT), reducing their share from 92.0% to 53.9% amid disruptions around the Strait of Hormuz.
• This was partially offset by a surge in imports from the United States, which rose 374% MoM to 533 KT (+421 KT), lifting its share to 36.5%, alongside incremental volumes from Iran (42 KT, +139%), the Russian Federation (32 KT), Indonesia (23 KT, +27.9%), and Argentina (23 KT).
• Despite this rebalancing, the shift toward long-haul cargoes implies higher freight intensity and longer supply chains, reinforcing near-term tightness and upward pressure on delivered LPG costs.

IOCL Price Update — 1 May 2026

• Unchanged: Retail Petrol, Diesel, Domestic LPG (14.2 kg @ Rs 913 in Delhi), ATF for domestic airlines, and PDS Kerosene — covering -80% of petroleum products.
  Revised upward:
  •    19 kg Commercial LPG: +Rs 993 (Delhi: Rs 2,078.50 → Rs 3,071.50; Mumbai: Rs 2,031 → Rs 3,024)
  •    5 kg Free Trade LPG (FTL): +Rs 261 per cylinder.

Crude Oil Market Update

• The US President Trump announced the US would assist ships stranded in the Strait of Hormuz, but the lack of a US-Iran peace deal kept the market supported.
• The OPEC+ group of crude oil exporters agreed to increase output for a third straight month in Jun'26 by 0.19 MBpd, but the decision is largely meaningless due to the ongoing closure of the Strait of Hormuz.
• The remaining members of OPEC+ are signalling that they will continue without UAE, showing that the group remains relevant and most likely believes it will continue to act as a balancing force between supply and demand.
• Asia's imports of crude oil have plunged to the lowest monthly total in at least 10 years due to the closure of the Strait of Hormuz, with South Korea and Japan being among the worst affected countries.
• The US is seeking to loan energy companies up to 92.5 mln bbl of crude from the Strategic Petroleum Reserve as part of a global agreement aimed at calming oil markets rattled by the US-Israeli war on Iran.
• The 92.5 mln bbl are part of the 172 mln bbl from the SPR that the US agreed in Mar'26 to loan as part of a pact with more than 30 countries in the International Energy Agency (IEA) to release about 400 mln bbl to help relieve markets. The new offer, if all of it is taken by oil companies, would fulfill the US goal to loan 172 mln bbl, bids are due on 04th May'26.
• The US government imposed sanctions on 35 entities and individuals for their roles in Iran's shadow banking sector, and warned banks against doing business with Chinese "teapot" refineries that pay tolls for shipments through the Strait of Hormuz.

SPR / IEA

IEA member nations have agreed to a coordinated release of 400 mln bbl — the largest emergency SPR release since the IEA was founded after the 1973 Oil Crisis. The US, under the Trump administration, is contributing 172 mln bbl structured as loans to companies with repayment including a premium.

Deliveries are expected to begin reaching the market by the end of next week and will continue over approximately 120 days. The first batch of 86 mln bbl has already been opened for bidding. Japan will released 80 mln bbl beginning 16th Mar'26.

IEA Region-wise Release Breakdown

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — 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 — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — 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.

Supply Analysis


Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 1.35–1.90 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.

• Scenario 1 (Preferred): Exchange of attacks between US/Israel and Iran continuing, leading to severe/significant/complete disruptions of crude oil and its products trade through the Strait of Hormuz, severely impacting Iraq's and Kuwait's crude oil production over the next 3 to 6 months. Full-year 2026 deficit: −1.90 MBpd. AMJ quarter most acute at −4.50 MBpd.
• Scenario 2 (Alternate): Partial disruptions of crude oil trade through the Strait of Hormuz, with Iran not targeting ships and oil tankers moving toward China, India, and select Asian nations outside the Western alliance. Full-year 2026 deficit: −1.35 MBpd. Balance returns to flat by OND '26.

Economic Updates

• On the US front, US retail sales recorded a solid rebound in Feb'26, rising 0.6% MoM and 3.7% on YoY, marking the strongest gain in seven months, supported by a recovery in motor vehicle purchases and seasonal factors. Core retail sales also came in firm at 0.5% MoM, indicating underlying consumption strength, with higher tax refunds playing a key role in sustaining household spending during the period.
• The US manufacturing activity continued to expand, with ISM PMI rising to 52.7 in March, its highest level since Aug'22. That said, the improvement was partly driven by slower supplier deliveries, reflecting supply chain disruptions rather than demand strength, particularly amid shipping constraints and trade frictions. This has also led to a sharp rise in input cost pressures, with the prices paid index jumping significantly, signaling building inflation at the producer level.

Price Outlook

Brent Crude 1M Futures are expected to trade in a range of 90 USD/bbl to 110 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.

LPG Market Update

08th Indian-flagged LPG vessel has transited the Strait of Hormuz and reached India

India’s LPG import slump in March'26 signals Gulf disruption impact, triggers strategic shift toward US supply

• India’s LPG import profile shifted sharply in March, with total volumes declining 31.5% MoM to 1,462 KT (down 674 KT), driven by a steep 59.9% drop in Gulf supplies (ex-Iran) to 788 KT (-1,177 KT), reducing their share from 92.0% to 53.9% amid disruptions around the Strait of Hormuz.
• This was partially offset by a surge in imports from the United States, which rose 374% MoM to 533 KT (+421 KT), lifting its share to 36.5%, alongside incremental volumes from Iran (42 KT, +139%), the Russian Federation (32 KT), Indonesia (23 KT, +27.9%), and Argentina (23 KT).
• Despite this rebalancing, the shift toward long-haul cargoes implies higher freight intensity and longer supply chains, reinforcing near-term tightness and upward pressure on delivered LPG costs.

IOCL Price Update — 1 May 2026

• Unchanged: Retail Petrol, Diesel, Domestic LPG (14.2 kg @ Rs 913 in Delhi), ATF for domestic airlines, and PDS Kerosene — covering -80% of petroleum products.
  Revised upward:
  •    19 kg Commercial LPG: +Rs 993 (Delhi: Rs 2,078.50 → Rs 3,071.50; Mumbai: Rs 2,031 → Rs 3,024)
  •    5 kg Free Trade LPG (FTL): +Rs 261 per cylinder.

Crude Oil Market Update

• The US is seeking to loan energy companies up to 92.5 mln bbl of crude from the Strategic Petroleum Reserve as part of a global agreement aimed at calming oil markets rattled by the US-Israeli war on Iran.
• The 92.5 mln bbl are part of the 172 mln bbl from the SPR that the US agreed in Mar'26 to loan as part of a pact with more than 30 countries in the International Energy Agency (IEA) to release about 400 mln bbl to help relieve markets. The new offer, if all of it is taken by oil companies, would fulfill the US goal to loan 172 mln bbl, bids are due on 04th May'26.
• Market grapevine indicates that the OPEC+ group is expected to agree on a small increase in oil output quotas on 03rd May'26, despite the loss of most of its exports due to the US-Israeli war with Iran and the exit of a key member, the United Arab Emirates.
• The group will likely agree to an increase of around 0.19 MBpd, similar to last month's hike, minus the UAE's share. This decision would signal that OPEC+ is continuing with a business-as-usual approach.
• The UAE decision to leave OPEC will significantly reduce the 65-year-old producer group's influence over the oil market, potentially triggering a price war among Gulf producers to regain market share after the Iran war.
• The UAE's exit may also weaken the OPEC+ alliance and encourage other members to question the value of limiting output, raising the risk of further defections and years of turbulence in the oil market.
• The US government imposed sanctions on 35 entities and individuals for their roles in Iran's shadow banking sector, and warned banks against doing business with Chinese "teapot" refineries that pay tolls for shipments through the Strait of Hormuz.
• The Treasury Department's Office of Foreign Assets Control (OFAC) said the designated individuals and firms had facilitated the movement of tens of bln of dollars tied to sanctions evasion and Iran's sponsorship of terrorism.

SPR / IEA

IEA member nations have agreed to a coordinated release of 400 mln bbl — the largest emergency SPR release since the IEA was founded after the 1973 Oil Crisis. The US, under the Trump administration, is contributing 172 mln bbl structured as loans to companies with repayment including a premium.

Deliveries are expected to begin reaching the market by the end of next week and will continue over approximately 120 days. The first batch of 86 mln bbl has already been opened for bidding. Japan will released 80 mln bbl beginning 16th Mar'26.

IEA Region-wise Release Breakdown

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — 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 — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — 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.

Supply Analysis


Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 1.35–1.90 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.

• Scenario 1 (Preferred): Exchange of attacks between US/Israel and Iran continuing, leading to severe/significant/complete disruptions of crude oil and its products trade through the Strait of Hormuz, severely impacting Iraq's and Kuwait's crude oil production over the next 3 to 6 months. Full-year 2026 deficit: −1.90 MBpd. AMJ quarter most acute at −4.50 MBpd.
• Scenario 2 (Alternate): Partial disruptions of crude oil trade through the Strait of Hormuz, with Iran not targeting ships and oil tankers moving toward China, India, and select Asian nations outside the Western alliance. Full-year 2026 deficit: −1.35 MBpd. Balance returns to flat by OND '26.

Economic Updates

• On the US front, US retail sales recorded a solid rebound in Feb'26, rising 0.6% MoM and 3.7% on YoY, marking the strongest gain in seven months, supported by a recovery in motor vehicle purchases and seasonal factors. Core retail sales also came in firm at 0.5% MoM, indicating underlying consumption strength, with higher tax refunds playing a key role in sustaining household spending during the period.
• The US manufacturing activity continued to expand, with ISM PMI rising to 52.7 in March, its highest level since Aug'22. That said, the improvement was partly driven by slower supplier deliveries, reflecting supply chain disruptions rather than demand strength, particularly amid shipping constraints and trade frictions. This has also led to a sharp rise in input cost pressures, with the prices paid index jumping significantly, signaling building inflation at the producer level.

Price Outlook

Brent Crude 1M Futures are expected to trade in a range of 90 USD/bbl to 110 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.

LPG Market Update

08th Indian-flagged LPG vessel has transited the Strait of Hormuz and reached India

India’s LPG import slump in March'26 signals Gulf disruption impact, triggers strategic shift toward US supply

• India’s LPG import profile shifted sharply in March, with total volumes declining 31.5% MoM to 1,462 KT (down 674 KT), driven by a steep 59.9% drop in Gulf supplies (ex-Iran) to 788 KT (-1,177 KT), reducing their share from 92.0% to 53.9% amid disruptions around the Strait of Hormuz.
• This was partially offset by a surge in imports from the United States, which rose 374% MoM to 533 KT (+421 KT), lifting its share to 36.5%, alongside incremental volumes from Iran (42 KT, +139%), the Russian Federation (32 KT), Indonesia (23 KT, +27.9%), and Argentina (23 KT).
• Despite this rebalancing, the shift toward long-haul cargoes implies higher freight intensity and longer supply chains, reinforcing near-term tightness and upward pressure on delivered LPG costs.

IOCL Price Update — 1 May 2026

• Unchanged: Retail Petrol, Diesel, Domestic LPG (14.2 kg @ Rs 913 in Delhi), ATF for domestic airlines, and PDS Kerosene — covering -80% of petroleum products.
  Revised upward:
  •    19 kg Commercial LPG: +Rs 993 (Delhi: Rs 2,078.50 → Rs 3,071.50; Mumbai: Rs 2,031 → Rs 3,024)
  •    5 kg Free Trade LPG (FTL): +Rs 261 per cylinder.

Crude Oil Market Update

• The UAE decision to leave OPEC will significantly reduce the 65-year-old producer group's influence over the oil market, potentially triggering a price war among Gulf producers to regain market share after the Iran war.
• The UAE's exit may also weaken the OPEC+ alliance and encourage other members to question the value of limiting output, raising the risk of further defections and years of turbulence in the oil market.
• The US President Trump is unhappy with Iran's latest proposal to resolve the ongoing war, dampening hopes for a resolution. Iran's proposal would set aside discussion of its nuclear program until the war is ended and disputes over shipping from the Gulf are resolved.
• Oil prices have risen as the conflict continues, with only seven ships crossing the Strait of Hormuz on 27th Apr'26, compared to 125-140 daily transits before the war.
• The US government imposed sanctions on 35 entities and individuals for their roles in Iran's shadow banking sector, and warned banks against doing business with Chinese "teapot" refineries that pay tolls for shipments through the Strait of Hormuz.
• The Treasury Department's Office of Foreign Assets Control (OFAC) said the designated individuals and firms had facilitated the movement of tens of bln of dollars tied to sanctions evasion and Iran's sponsorship of terrorism.

SPR / IEA

IEA member nations have agreed to a coordinated release of 400 mln bbl — the largest emergency SPR release since the IEA was founded after the 1973 Oil Crisis. The US, under the Trump administration, is contributing 172 mln bbl structured as loans to companies with repayment including a premium.

Deliveries are expected to begin reaching the market by the end of next week and will continue over approximately 120 days. The first batch of 86 mln bbl has already been opened for bidding. Japan will released 80 mln bbl beginning 16th Mar'26.

IEA Region-wise Release Breakdown

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — 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 — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — 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.

Supply Analysis


Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 1.35–1.90 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.

• Scenario 1 (Preferred): Exchange of attacks between US/Israel and Iran continuing, leading to severe/significant/complete disruptions of crude oil and its products trade through the Strait of Hormuz, severely impacting Iraq's and Kuwait's crude oil production over the next 3 to 6 months. Full-year 2026 deficit: −1.90 MBpd. AMJ quarter most acute at −4.50 MBpd.
• Scenario 2 (Alternate): Partial disruptions of crude oil trade through the Strait of Hormuz, with Iran not targeting ships and oil tankers moving toward China, India, and select Asian nations outside the Western alliance. Full-year 2026 deficit: −1.35 MBpd. Balance returns to flat by OND '26.

Economic Updates

• On the US front, US retail sales recorded a solid rebound in Feb'26, rising 0.6% MoM and 3.7% on YoY, marking the strongest gain in seven months, supported by a recovery in motor vehicle purchases and seasonal factors. Core retail sales also came in firm at 0.5% MoM, indicating underlying consumption strength, with higher tax refunds playing a key role in sustaining household spending during the period.
• The US manufacturing activity continued to expand, with ISM PMI rising to 52.7 in March, its highest level since Aug'22. That said, the improvement was partly driven by slower supplier deliveries, reflecting supply chain disruptions rather than demand strength, particularly amid shipping constraints and trade frictions. This has also led to a sharp rise in input cost pressures, with the prices paid index jumping significantly, signaling building inflation at the producer level.

Price Outlook

Brent Crude 1M Futures are expected to trade in a range of 90 USD/bbl to 110 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.

LPG Market Update

8th Indian-flagged LPG vessel has transited the Strait of Hormuz and reached India

Commercial LPG Price Hike — 1st April 2026 (Delhi)

• Commercial LPG prices increased by ₹195.50 per 19-kg cylinder on April 1, 2026. A 19-kg cylinder now costs ₹2,078.50 in Delhi — up from ₹1,883 earlier.
• This is the second monthly increase, following a ₹114.50 rise in March. The hike affects restaurants, hotels, and small businesses. The adjustment indicates that prior increases in international prices, along with possible margin realignments, are still being passed through in the domestic market.
• In comparison, the 14.2 kg domestic LPG cylinder price has increased by only ₹60 (7%), with no change in the latest revision. This indicates a relatively controlled and stable pricing approach for household consumers, in contrast to the continued upward adjustments in the commercial segment.
• International LPG benchmarks have also seen increases over the period, with Mont Belvieu prices rising by ₹110 (25%) and Landed CIF prices by ₹125 (20%) on 1st Apr'26 as compared to 1st Feb'26. However, the magnitude of increase in commercial LPG prices, particularly in absolute terms, remains notably higher than that of domestic cylinders.

India’s LPG import slump in March'26 signals Gulf disruption impact, triggers strategic shift toward US supply

• India’s LPG import profile shifted sharply in March, with total volumes declining 31.5% MoM to 1,462 KT (down 674 KT), driven by a steep 59.9% drop in Gulf supplies (ex-Iran) to 788 KT (-1,177 KT), reducing their share from 92.0% to 53.9% amid disruptions around the Strait of Hormuz.
• This was partially offset by a surge in imports from the United States, which rose 374% MoM to 533 KT (+421 KT), lifting its share to 36.5%, alongside incremental volumes from Iran (42 KT, +139%), the Russian Federation (32 KT), Indonesia (23 KT, +27.9%), and Argentina (23 KT).
• Despite this rebalancing, the shift toward long-haul cargoes implies higher freight intensity and longer supply chains, reinforcing near-term tightness and upward pressure on delivered LPG costs.

India’s LPG balance under pressure as Hormuz disruptions persist, with vessel arrivals providing short-term supply relief

• India’s LPG supply–demand balance remains under near-term pressure amid geopolitical disruptions, with domestic demand estimated at 92.6–95.0 KT/day (~33 MMT annually), of which 55–60 KT/day (60–65%) is met through imports and ~35 KT/day from domestic production; notably, ~90% of imports transit through the Strait of Hormuz, creating significant exposure to ongoing disruptions.
• Recent vessel inflows have provided partial relief, with Hellas Gladiator (24 KT, Netherlands) and Gas Jupiter (24 KT, United States) having arrived on March 30 at Ennore Port and Visakhapatnam Port respectively, followed by BW TYR reaching Mumbai on March 31; BW ELM is expected to arrive at Mangaluru on April 1 after successfully transiting the Strait of Hormuz under Indian Navy escort as part of Operation Urja Suraksha.
• Earlier arrivals of Jag Vasant and Pine Gas (combined 92.6 KT; March 26–27) added roughly one day of national demand cover, along with the previously discharged Shivalik and Nanda Devi cargoes (92.5 KT; March 15–16) offering temporary relief despite persistent structural supply risks.