Oil prices remained elevated above the $100 per barrel mark as markets continue assessing the impact of escalating US-Iran tensions on global crude supply. Brent crude declined around 0.82% to $105.90 a barrel on Friday, September 25, while US West Texas Intermediate crude was at $93.05 a barrel, losing 1.65% as well. This decline follows a sharp rebound in global crude prices on Wednesday, September 23, when crude prices jumped nearly 4% as investors were assessing the impact of the escalation of the Iran-US situation on global crude supply. The volatility reflects ongoing market uncertainty over potential supply disruptions from the Middle East region, with the Brent-WTI spread reaching $12.68, the widest since May, as speculation around US diesel export bans continues to widen the gap between the two benchmarks.
Markets are closely watching Saudi Arabia's efforts to reroute crude shipments after attacks disrupted parts of its East-West pipeline network. Saudi Aramco has increased shipments through the Strait of Hormuz after halting some exports through Yanbu. Data cited by JPMorgan analysts showed Saudi oil flows through the strategic waterway averaged about 2.9 million barrels per day over the six days to September 18, sharply higher than around 700,000 bpd in August. The increase suggests that Saudi Arabia is finding alternative routes to keep exports moving despite attacks on its energy infrastructure. However, the decline in oil prices does not mean supply risks have vanished completely. Yemen's Iran-backed Houthis said they had attacked targets in Riyadh and a Saudi Aramco facility in Yanbu. The attacks come after strikes on Saudi Arabia's East-West pipeline, which carries crude from the country's eastern oil fields towards the Red Sea. The wider conflict therefore remains a major source of uncertainty for global oil markets.
Domestic fuel prices stayed unchanged on September 25 despite the decline in crude prices, with Brent crude trading at $105.90 a barrel. Petrol prices across major Indian cities remained stable, with Delhi at ₹102.12 per litre, Mumbai at ₹111.21 per litre, Kolkata at ₹113.51 per litre, Chennai at ₹107.77 per litre, Hyderabad at ₹115.69 per litre, and Bengaluru at ₹110.89 per litre. Diesel prices also remained unchanged, with Delhi at ₹95.20 per litre, Mumbai at ₹97.83 per litre, Kolkata at ₹99.82 per litre, Chennai at ₹99.55 per litre, Hyderabad at ₹103.82 per litre, and Bengaluru at ₹98.80 per litre. While prices in the international market remained volatile over a prolonged period, domestic fuel prices have remained unchanged since May. State-run oil marketing companies have been keeping the rates unchanged as there are many other factors such as the rupee-dollar exchange rate, refining costs, taxes, dealer margins, and others that they need to consider for deriving the fuel prices in India, and not just international crude prices.
While oil prices have dropped below $100 per barrel, the global diesel market continues to face unprecedented challenges with US diesel prices breaching $6.50 per gallon for the first time on September 21, 2026. This represents an approximately 75.81% increase compared to the $3.70 per gallon benchmark recorded in the previous year. The surge is primarily attributed to a refined product crunch rather than raw crude oil shortage, with global processors running at maximum limits. Two primary geopolitical conflicts are throttling supply: US-Iran tensions over the Strait of Hormuz and Ukrainian drone attacks on Russian refining hubs. The disconnect between falling raw WTI crude prices and soaring refined diesel prices demonstrates that the current crisis is a refining bottleneck rather than an extraction issue. High crack spreads are failing to translate into higher output because global processors are already running at their absolute limits.
Latest market data shows petrol prices have remained stable with minimal fluctuations over the past week, reflecting balanced global oil market conditions and steady demand levels globally. However, the global diesel crisis threatens broader economic inflation, with the US Federal Reserve raising interest rates by 25 basis points to 3.75%–4.00% in September 2026 to combat energy-driven inflation. High diesel prices directly inflate operating expenses for freight, logistics, and agricultural harvesting, transmitting pricing pressure to consumer goods. For India, while domestic retail rates are currently being kept stable by state-run oil companies, any prolonged global refined product squeeze will inevitably pressure domestic margins and import bills if crude prices remain elevated. The current price stability comes amid ongoing geopolitical uncertainty, with Brent crude remaining elevated above $100 per barrel as markets continue to weigh the impact of US-Iran tensions on global crude supply, despite hopes of possible US-Iran truce and ongoing diplomatic efforts.
