Energy and Oil Sector

Indian Oil has signed a five-year supply agreement with Mauritius's State Trading Corporation to provide the island nation's entire import requirement of petrol, diesel, and aviation fuel. The deal, inked during Petroleum Minister Hardeep Singh Puri's visit this week, marks the first long-term supply pact an Indian state-owned oil company has concluded outside South Asia in recent years. Mauritius, heavily dependent on imports and hit by West Asia supply disruptions, gains long-term price certainty and energy security; India deepens its strategic footprint in the Indian Ocean and locks in a new customer for refined products. The agreement builds on an energy partnership dating to 2001, when Indian Oil established a subsidiary in Mauritius. India's refineries produce 267 million tonnes of refined petroleum annually across 23 facilities, making it a net exporter already supplying Nepal, Bhutan, Bangladesh, the Maldives, and Southeast Asia. The pact also covers training, capacity building for Mauritian officials, and biofuels cooperation through the Global Biofuels Alliance, which India launched during its G20 presidency. Commercial terms and volumes remain undisclosed.

Oil futures fell 2% in early Asian trade Monday as traders locked in profits from last week's 5% rally, with WTI sliding to $85.18 per barrel and Brent to $92.32. The pullback came as markets awaited Treasury Secretary Scott Bessent's announcement of new U.S. sanctions on Iran, which he had described in the Financial Times over the weekend as an "economic D-Day" targeting countries and entities that buy Iranian crude, transport it, or facilitate Tehran's financial transactions. The U.S. blockade of Iranian ports has already redirected 70 commercial vessels and disabled three, according to CENTCOM, while Iranian crude offers to Chinese buyers have declined and prices for available barrels have risen. Bessent's 2 p.m. press conference Monday will be the next major catalyst; if the new measures successfully deter buyers or intermediaries, the oil market could tighten further. Iran's Supreme National Security Council head Mohsen Rezaei warned that any country joining the U.S. campaign would face an "act of war," though President Masoud Pezeshkian has continued to defend diplomacy and a June memorandum with Washington. Pakistani Army Chief Field Marshal Asim Munir was expected in Tehran on Monday to push both sides toward renewed negotiations. No confirmed attacks on shipping in the Strait of Hormuz have occurred in the past 48 hours, though tanker traffic has slowed to a trickle.

Oil prices fell Monday as investors awaited details of what the Trump administration has billed as its toughest-ever sanctions campaign against Iran. West Texas Intermediate futures declined about 1.3% to $85.93 per barrel, while Brent crude lost 1.24% to $93.22 a barrel. U.S. Treasury Secretary Scott Bessent is set to unveil the new sanctions package later Monday, framing the effort as "the single greatest financial offensive ever marshaled against an adversary" and vowing to "collapse" the Islamic Republic with what Washington calls the "toughest sanctions in history." The administration is pushing U.S. allies and other countries to cut economic ties with Tehran and has threatened steep financial penalties for any nation that helps Iran evade the measures. Iran's Revolutionary Guard Corps dismissed the threat, saying Tehran has ways to counter the pressure and can "easily establish economic relations with countries." Commonwealth Bank of Australia expects Brent crude to trade between $70 and $100 a barrel in the second half of 2026, with prices potentially falling toward the bottom of that range if oil flows through the Strait of Hormuz recover even modestly—estimating that 50% to 60% of pre-war quantities would be enough to revive expectations of an oversupplied global market. The bank also flagged that if U.S. sanctions succeed in isolating Iran economically, Tehran's ability to respond through increased violence becomes a growing risk for energy markets.