Brent crude prices retreated in the session as market participants digested reports of a ceasefire between the U.S. and Iran, easing immediate fears of a supply disruption in the Strait of Hormuz.
The diplomatic development has cooled risk premiums that had been propping up energy benchmarks, shifting focus back to fundamental demand drivers rather than geopolitical scarcity.
The softening in oil prices is providing a tailwind for emerging-market central banks grappling with imported inflation.
In India, the Reserve Bank of India (RBI) is widely expected to maintain its benchmark policy rate at 5.25% in its upcoming Monetary Policy Committee meeting.
With crude costs declining, the pressure on the rupee and domestic inflation metrics has eased, allowing policymakers to prioritize growth support over tightening.
Debopam Chaudhuri, Chief Economist at Piramal Group, noted that the RBI is unlikely to raise interest rates in the near term given the trajectory of crude prices and the country's growth outlook.