Brent Swings $102–$108 on US-Iran Standoff as Petrol Holds ₹102.12 and Diesel ₹95.20 Across India

Mumbai, Oct 3: Crude oil prices saw sharp swings during the week ended 2 October 2026 as markets reacted to developments in the US-Iran standoff and changing expectations around global oil supplies.

Brent crude moved between the $102 and $108 levels before falling sharply towards the end of the week. Prices initially climbed on concerns over possible supply disruptions after US-Iran negotiations broke down. They later eased as Saudi Arabia restored part of its oil export infrastructure and US crude inventories rose unexpectedly.

In India, petrol and diesel prices remained unchanged throughout the week. State-run oil marketing companies (OMCs) continued to keep domestic fuel prices steady despite the sharp movements in international crude markets. Petrol remained at ₹102.12 per litre, while diesel stayed at ₹95.20 per litre.

Trump Rejects Iran’s Hormuz Proposal; Brent Rises 0.92% to $105.28 on 28 September

Crude oil started the week on a firmer note on Monday, 28 September, after US President Donald Trump rejected Iran’s seven-day proposal linked to reopening the Strait of Hormuz in return for US concessions.

Brent crude futures for November delivery rose $0.96, or 0.92%, to settle at $105.28 a barrel. US West Texas Intermediate (WTI) crude also gained, rising $0.19, or 0.21%, to $92.60 a barrel.

Geopolitical concerns drove the initial rise. US media reports said an Iranian cruise missile had struck a US vessel in the Strait of Hormuz on 14 September, injuring eight Marines. The Pentagon had not previously disclosed the incident. Iran’s foreign ministry said the Strait remained under its full control, while US Central Command rejected the claim.

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The latest developments brought some of the geopolitical risk premium back into oil prices. Traders had reduced that premium after the ceasefire narrative emerged on 25 September. Even after Monday’s rise, however, Brent remained below the $106.60 level recorded on 24 September.

Saudi Pipeline Restores 3.5 Million Barrels a Day; Brent Falls to $102.59

The supply outlook changed on Tuesday, 29 September, after reports confirmed that Saudi Arabia had restored around half the flows through its East-West Pipeline.

The pipeline was handling at least 3.5 million barrels a day at the Red Sea port of Yanbu. It had remained shut since 10 September after drone strikes disrupted operations.

The development gave traders some relief because the pipeline provides Saudi Arabia with an alternative export route that does not depend on the Strait of Hormuz.

Saudi Aramco also started offering discounts of around $9 a barrel for crude loaded in Omani waters. That marked a sharp change from the premiums of $10–$20 a barrel seen earlier.

Brent had climbed as high as $107.44 during the session but later reversed course. It settled $2.69, or 2.6%, lower at $102.59 a barrel. WTI fell $3.22, or 3.5%, to $89.38.

The restoration of Saudi Arabia’s alternative export capacity reduced concerns about a prolonged supply disruption. However, uncertainty around the wider US-Iran standoff continued to keep oil markets volatile.

US Crude Inventories Rise 922,000 Barrels; Brent Drops to $96.92

The oil market faced another setback on Wednesday, 30 September, after fresh US inventory data pointed to higher crude supplies.

The US Energy Information Administration (EIA) reported that commercial crude oil inventories rose by 922,000 barrels to 427.3 million barrels in the week ended 25 September. Analysts had expected inventories to fall by around 300,000 barrels.

The unexpected increase added to the pressure created by the recovery in Gulf exports. Brent eventually fell 1.1% to $96.92 a barrel, while WTI declined 1.4% to $89.18 on Thursday, 1 October.

The inventory figures also showed that the pressure was not uniform across the oil market. US gasoline inventories fell by 1.684 million barrels to 204.4 million barrels. Distillate stocks, which include diesel and heating oil, dropped by 2.251 million barrels to 105.2 million barrels.

Distillate inventories remained 14% below the five-year average, pointing to continued tightness in refined fuel supplies even as crude inventories increased.

Despite the late-week decline, Brent still gained around 14% during September, marking its strongest monthly increase since July. WTI rose about 5% over the same month.

The sharp moves during the week highlighted how quickly crude prices can respond to changes in geopolitical risk, supply routes and inventory data. For Indian motorists, however, the volatility in global oil markets did not translate into a change in petrol or diesel prices during the week.

MCX October Crude Peaks at ₹9,292, Then Slumps to ₹8,580 by 1 October

On the Multi Commodity Exchange (MCX), the October crude oil contract surged 3.77% to ₹9,182 per barrel on Monday, 28 September, hitting an intraday high of ₹9,292 with open interest rising 15.71%. By Tuesday, 29 September, the contract climbed further to ₹9,115 per barrel, gaining ₹204, or 2.29%, in a business turnover of 3,937 lots. The rally proved short-lived.

On Wednesday, 30 September, MCX October crude declined 1.05% to trade at ₹8,817, as the global supply outlook improved. By Thursday, 1 October, the October contract had slumped to ₹8,580, down 1.76% from the previous close of ₹8,734, while the November contract fell 1.65% to ₹8,429. Open interest in the October contract declined 6.03% to 13,029 contracts during the sell-off, indicating liquidation of long positions.

The contract found support near ₹8,736, with resistance at ₹9,004. The MCX Crude Oil Mini contract for 19 October expiry traded at ₹8,574, down 2.95%, reflecting similar bearish sentiment.

Indian Crude Basket Hits Record $123.70 on 28 September Before Easing to $116.52

The Indian crude oil basket, which reflects the average price of crude grades actually imported by Indian refiners, was last recorded at $123.70 per barrel on 28 September, up $6.02, or 5.12%, according to the Petroleum Planning and Analysis Cell (PPAC). By 29 September, the basket had eased to $116.52 per barrel.

The September average of $116.04 was the highest since the US-Iran conflict began, compared with $90.19 in August and $83.22 in July, a 28.66% month-on-month surge. The basket’s premium over Brent futures, reaching $15–$18 per barrel at the peak, was driven by India’s 77.81% exposure to Brent Dated sweet crude and 22.19% to Oman-Dubai sour crude, alongside elevated freight and insurance costs linked to Strait of Hormuz disruptions. West Asian crude imports surged 74% month-on-month to 2.10 million barrels per day in September from 1.21 mbd in August, accounting for 39.5% of total supplies. Russian crude arrivals eased to approximately 1.75 million barrels per day in September, the lowest since April 2026, as Chinese demand absorbed available ESPO grade volumes.

Petrol Holds at ₹102.12 in Delhi and ₹111.21 in Mumbai; Diesel Steady at ₹95.20 and ₹97.83

Domestic retail fuel prices remained completely unchanged through the week, with state-run OMCs making no revisions despite the sharp swings in international crude. In Delhi, petrol was priced at ₹102.12 per litre and diesel at ₹95.20 from Monday, 28 September through Friday, 2 October.

Mumbai recorded petrol at ₹111.21 per litre and diesel at ₹97.83, with rates fluctuating marginally between ₹111.18 and ₹111.31 over recent days. Kolkata quoted petrol at ₹113.51 and diesel at ₹99.82, while Chennai recorded ₹107.77 and ₹99.55 respectively. Hyderabad had the highest rates among major metros at ₹116.15 for petrol and ₹104.23 for diesel, while Bengaluru recorded ₹111.68 and ₹99.56. Jaipur quoted petrol at ₹112.66 and diesel at ₹98.25, while Gurgaon and Noida recorded petrol at ₹102.97 and ₹101.96 respectively.

OMCs Absorb Cost Pressure as Refining Margins Squeeze; Rupee Breaches 96.14

The sustained rally in crude oil prices through September placed significant pressure on the marketing margins of state-run OMCs, including Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation. Reports indicated that OMCs were facing daily losses of approximately ₹530 crore as retail prices remained unchanged while input costs surged.

The Finance Ministry’s Monthly Economic Review flagged the sharp rise in crude prices as a risk to the economy, noting that domestic price pressures intensified across retail, wholesale and producer levels because of renewed global oil market pressures. The Indian rupee breached the psychologically important ₹96-per-dollar mark on Tuesday, 29 September, weakening to ₹96.14 after closing at ₹95.98 in the previous session. The rupee has depreciated 6.66% against the dollar since January 2026.

The Reserve Bank of India intervened in both spot and non-deliverable forward markets, with state-run banks selling dollars believed to be on behalf of the central bank. The combination of elevated crude prices and a weakening rupee amplified import costs, with India importing more than 85% of its crude oil requirements.

Government Cuts Windfall Tax on Diesel to ₹16/Litre; Petrol Levy Unchanged

The Finance Ministry reduced the windfall gains tax on exports of diesel and aviation turbine fuel (ATF) for the fortnight beginning 1 October 2026. Export duty on diesel decreased to ₹16 per litre from ₹20 per litre, while the ATF tax dipped to ₹10.5 per litre from ₹15 per litre.

The levy on petrol exports remained unchanged at ₹0.5 per litre. The move was aimed at supporting refining margins amid volatile global product cracks. Commercial LPG cylinder prices were raised by ₹62.50 to ₹2,810 per 19-kg cylinder, while ATF prices rose by ₹16 per litre to ₹137 for domestic airlines.

These adjustments formed part of the fortnightly revision mechanism for petroleum product taxation and pricing, with export levies reviewed based on international crude and product price movements.

Crude-to-Pump Transmission Muted as Rupee Depreciation Offsets Global Decline

The week’s crude-price movement was only partially reflected in Indian pump prices, with retail rates remaining entirely unchanged. The transmission chain from global crude to Indian retail fuel involves multiple stages: international Brent and WTI benchmarks feed into the Indian crude basket, which averaged $116.04 in September; the rupee’s depreciation past 96 against the dollar increased the landed cost of imports; refining costs and freight premiums added to the base; central and state taxes, which account for approximately 50–55% of the retail price, further inflate the final cost; and OMC pricing decisions determine the final pump rate.

Petrol and diesel prices may remain unchanged even when international crude moves sharply because OMCs absorb short-term volatility to avoid disrupting retail consumers. The government’s windfall tax adjustments and OMC margin management have created a buffer that smooths the pass-through of global price swings to domestic consumers. The week’s crude market was defined by extreme volatility, with Brent swinging between $96.92 and $107.37 as traders assessed recovering Gulf supply against unresolved US-Iran tensions. The Indian crude basket averaged $116.04 in September, up 28.66% from August, while the rupee weakened past 96 against the dollar. Petrol and diesel prices remained unchanged across all major cities through the week, with OMCs absorbing the cost pressure. Market participants will monitor the OPEC+ meeting on 4 October and the trajectory of US-Iran negotiations for directional cues.