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Informist, Tuesday, May 5, 2026

 

By Taniva Singha Roy

 

MUMBAI - Crude oil prices are likely to move with a positive bias in May, unless the conflict between US and Iran is settled. With no peace deal in sight and shipping through the strategic waterway still constrained, crude oil prices will remain elevated, according to analysts.

 

US President Donald Trump said the US would begin efforts to assist ships stranded in the Strait of Hormuz. However, Iran's military, in response, warned US forces Monday not to enter the strait and said that its forces will respond harshly to any threat. Although a ceasefire has held since early April, mutual blockades have severely restricted oil flows, prompting the International Energy Agency to warn of an unprecedented supply shock, which could support prices.

 

According to an Informist poll, the median estimate of seven broking firms puts the May crude oil contract on the Multi Commodity Exchange of India in a range of INR 8,700-INR 10,900 per barrel. The June contract of West Texas Intermediate crude oil on the New York Mercantile Exchange is expected between $90 and $117 per barrel. At 1334 IST, the most-active June contract of crude oil on the NYMEX was down nearly 2% at $104.55 per barrel. The most-active May contract of crude oil on the MCX was down over 1% at INR 9,943 per barrel.

 

Volatility will remain high in crude oil prices as geopolitical tension in West Asia remains elevated, ICICI direct said in its monthly outlook. Further, prices may rally as hope of a diplomatic breakthrough is fading and efforts to revive talks stalled, with both the nations showing little signs of softening, it said.

 

"Overall, it will trade with a positive bias and the trend will remain bullish until the conflict is not settled," said Manoj Jain, director of Prithvi Finmart. Oil prices are expected to trade higher unless the issue of the Strait of Hormuz is solved, said Smith Bhayani, analyst at Nirmal Bang.

 

"As long as it is above $90, the trend is positive," said Jateen Trivedi, analyst at LKP Securities. Despite the Organization of the Petroleum Exporting Countries and allies Sunday announcing a June output increase of 188,000 barrels per day, logistical constraints along the Strait limit its near-term impact, rendering the move largely symbolic, Kaynat Chainwala, AVP Commodity Research, Kotak Securities, said in a note.

 

However, oil is likely to remain volatile as a credible diplomatic breakthrough could trigger a sharp downside correction, while further escalation may quickly drive prices back higher. "Until clearer signals emerge, elevated and reactive price action looks set to continue," she added.

 

There is cautious optimism around Iran's updated 14-point proposal and Trump's comments indicating talks are progressing. Tehran is seeking sanctions relief, US withdrawal, and security guarantees before any nuclear commitments, while Washington maintains a nuclear-first stance, according to analysts.

 

Meanwhile, increased US energy exports could also cap gains in prices. The market currently reflects a scenario where WTI is unlikely to reach the $150 threshold. This is consistent with a decrease in WTI futures, suggesting reduced expectations of price spikes.

 

In a recent statement, Scott Bessent, US Secretary of the Treasury, indicated that the futures market is predicting lower oil prices, which could impact the likelihood of WTI Crude Oil reaching the $150 mark this month. Bessent attributed this outlook to the current record levels of US energy exports and potential changes in the Strait of Hormuz situation. The strategic choke point has seen limited shipping activity due to ongoing US-Iran tensions but any easing could further support lower oil prices.

 

Developments regarding US-Iran negotiations and the status of the Strait of Hormuz are a few things that investors will monitor, analysts said. These factors could significantly influence oil prices. Additionally, updates from the US Energy Information Administration and any shifts in global energy demand or supply disruptions could further impact market expectations, they added.

 

The following are the estimates of brokerages for crude oil prices in May:

 

Brokerage	MCX support (in INR)	MCX resistance (in INR)	NYMEX WTI support (in $)	NYMEX WTI resistance (in $)
Axis Securities	9,500	10,900	85	120
Kedia Advisory	7,600	11,400	80	120
Kotak Securities	9,200	11,000	92	116
Nirmal Bang	8,400	11,200	92	125
Prithvi Finmart	8,500	10,750	90	117
SMC Global Securities	8,700	10,600	85	110
Ventura Securities	9,800	10,700	103	112
MEDIAN	8,700	10,900	90	117

 

End

 

US$1 = INR 98.43

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Akul Nishant Akhoury

 

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