Crude oil prices crash 9% below $94 on US-Iran peace hopes; WTI slides to $87

Crude oil prices suffered one of their sharpest single-session declines in recent months in overnight trade, with Brent plunging nearly 9% to below $95 a barrel - its lowest level in two months - after breaching the crucial $100 mark. The sharp sell-off was driven by growing optimism that the US midterm election outcome could increase political pressure on President Donald Trump to pursue a negotiated settlement to the US-Israeli conflict with Iran.

On Wednesday, Brent crude, the international benchmark, fell 8.7%, or $8.98, in a single session to slip below $94 a barrel, while West Texas Intermediate (WTI), the US benchmark, declined to around $87 a barrel. At the time of reporting, Brent was trading at $93.70 per barrel, while WTI stood at $87.04.

The decline could be a significant positive for India, which relies heavily on crude oil imports. Sustained moderation in energy prices could ease pressure on the country's import bill, domestic inflation and current account deficit.

Will the fall in crude prices boost global risk appetite?

Hariselvan Radhakrishnan, Founder and CEO of HST Wealth, said the fall in crude, alongside easing US Treasury yields and a rally on Wall Street, had improved the global risk environment. GIFT Nifty trading above 24,300 pointed to a strong opening for Indian equities, he said.

However, he cautioned that the decline in crude was driven by expectations rather than a confirmed settlement or full restoration of energy flows. Any setback in negotiations could trigger renewed volatility.

Radhakrishnan also highlighted the return of foreign institutional investors (FIIs), who invested ₹17,236 crore over the first three trading sessions of November, while domestic institutional investors recorded net sales of ₹7,783 crore.

Ponmudi R, CEO of Enrich Money, said the decline in crude could improve India's macroeconomic outlook and strengthen investor appetite for domestic equities. He also noted that FIIs had bought approximately ₹7,284 crore in the previous session.

Wall Street rallied overnight following the US midterm election outcome, with the Dow Jones Industrial Average rising 3%, while the S&P 500 and Nasdaq Composite gained 1.58% and 0.91%, respectively. Asian markets, however, remained subdued. Japan's Nikkei, South Korea's Kospi and Taiwan's market traded lower amid weakness in AI and semiconductor stocks, although they recovered from their early-session lows.

Kaveri More, Commodity Technical Analyst at Choice Broking, said crude prices remained under pressure as investors assessed fresh proposals in US-Iran peace negotiations. She added that easing geopolitical concerns, continued Iranian oil flows and prospects of diplomatic progress were weighing on prices.

Going ahead, crude prices are likely to remain sensitive to the progress of negotiations and developments affecting Middle Eastern oil supplies.