![\"US-Iran](\"https:\/\/static.toiimg.com\/thumb\/msid-131761767,imgsize-117072,width-400,height-225,resizemode-4\/crude-oil-supplies.jpg\" "\\"The")
<\/div>\n<\/div>\n<\/div>\nUS-Iran peace deal signing and the full opening of the Strait of Hormuz, if it goes through, will bode well for availability of crude oil supplies globally. Crude oil supplies could return to normal and benchmark prices may slip below $80 a barrel within the next two to three weeks if the proposed US-Iran agreement is formally signed on Friday and shipping through the Strait of Hormuz resumes without disruptions, according to executives at Indian refining companies.The United States and Iran have reached an understanding aimed at ending military conflict, lifting the US naval blockade on Iran and restoring navigation through the Strait of Hormuz. The two sides have also agreed to continue negotiations for another 60 days in an effort to resolve outstanding issues related to Iran’s nuclear programme. Following news of the agreement, Brent crude dropped 5% on Monday to around $83 a barrel.Prior to the outbreak of the conflict, the Gulf region supplied roughly 40% of India’s crude oil imports. After the war began on February 28, inflows from the region declined sharply. While imports from Saudi Arabia and the United Arab Emirates recovered substantially after an initial drop, supplies from Iraq, Kuwait and several other producers remained under considerable strain.Also Read | \u2018Let oil flow\u2019: What Trump\u2019s possible peace deal with Iran, Strait of Hormuz opening mean for India<\/a><\/p>\n Industry officials expect the Strait to reopen after the deal is signed. One refinery executive told ET that if both the US Navy and Iran’s Revolutionary Guards adhere to the agreement and refrain from actions that could derail the process, the oil market could stabilize within 15 to 20 days. <\/p>\n The executive added that under such a scenario, Brent crude prices could fall below the $80-per-barrel mark.The reopening of the waterway would also allow oil tankers currently stranded in the Persian Gulf to resume deliveries to consuming markets. In addition, producers are believed to be holding substantial volumes of crude in onshore storage facilities and would likely move quickly to ship those supplies once normal trade routes are restored.For India, the Gulf’s geographical proximity could translate into quicker access to substantial crude oil supplies, according to refinery executives. One industry official noted that this may reduce the country’s reliance on longer-distance shipments arriving from markets such as the United States and Russia.The executive also said that damage suffered by oil production infrastructure across the Gulf region appears limited, suggesting that facilities could resume operations relatively soon. As a result, crude supply from the region may recover far more rapidly than many market participants currently anticipate.Industry executives further pointed out that additional output from OPEC+ producers, combined with the return of Iranian crude to international markets, would help ease supply constraints and exert downward pressure on global oil prices.They added that the cessation of hostilities, along with the lifting of sanctions on Iran and greater availability of oil tankers, is likely to significantly lower freight and insurance costs associated with energy shipments.However, the same pace of recovery may not extend to liquefied natural gas (LNG) and refined petroleum products, where disruptions could linger for longer.<\/div>\nWhat it means for India\u2019s oil supply<\/h2>\n<\/p>\n
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