The price of oil has fallen to levels not seen since before the Iran war as traffic through the key Strait of Hormuz shipping route gradually resumes.

Global benchmark Brent crude briefly fell below, $72.48 ($55) a barrel, the price it was at the day before the US and Israel launched attacks on Iran on 28 February, before edging up to $72.63.

Energy prices have been on a wild ride since Iran responded to the strikes by effectively closing the strait, a critical waterway for oil and gas shipments.

The cost of crude has been moving sharply lower since the US and Iran signed a Memorandum of Understanding (MOU) on 17 June which set out a 60-day period for negotiations on Tehran’s nuclear programme and other measures to end the war.

Representatives from the two sides met in Switzerland last weekend for talks to end the war, which resulted in the US partially lifting sanctions on Iranian oil exports.

The number of vessels crossing the Strait of Hormuz has risen significantly since the MOU was signed, according to maritime intelligence firm Kpler.

The ships passing through the waterway in recent days include those carrying crude oil, liquefied natural gas (LNG), fertiliser and other goods, Kpler told the BBC.

The US and Iran had also formed a “communication line” to prevent misunderstandings “with the aim of safe passage for commercial vessels through the Strait of Hormuz”, mediators Qatar and Pakistan said in a joint statement on Monday.

There has been a “tremendous shift” with far more ships using the strait in recent days, said Dimitris Maniatis, the chief executive of Marisks, a maritime risk advisory firm working with ships stuck in the region.

His company estimates around 80 ships have crossed the Strait of Hormuz since Monday after the first round of peace talks between US and Iran in Switzerland.

A limited number of ships can cross a northern passageway with the permission of Iranian authorities, he said.

The US navy has also provided guidance for vessels to travel through a southern route that is safe from mines and other obstacles that has been laid out since the war, Maniatis said.

But the number of ships crossing the strait is still below levels seen before the war, when it was used by more than 100 ships a day.

Hundreds of ships still appear to be waiting in the Gulf.

The recent correction across commodities has sparked concerns among investors, but market expert Dharmesh Kant from Cholamandalam Securities believes the pullback should be viewed as an opportunity rather than a warning sign. Speaking to ET Now, Kant said the broader commodity cycle remains intact, supported by improving global demand, infrastructure spending and India’s economic momentum.

Copper, aluminium, crude oil and silver have all witnessed sharp declines over the past few sessions, dragging commodity stocks lower. However, Kant believes such corrections are a normal part of long-term commodity cycles.

“Commodity as an asset class is always like this. Whenever the upside is there, it continues for one or two years. We have already seen a major part of the upcycle, and normally it corrects and consolidates for a meaningful period,” he said.

According to Kant, demand fundamentals remain favourable. He expects industrial demand for metals such as aluminium, copper and zinc to strengthen as global economic activity improves. Silver, too, continues to enjoy structural support due to its widespread use in electric vehicles, electronics and renewable energy.

“Silver demand has an industrial connotation. Electric vehicles, electronics and solar panels all use silver, and demand is likely to compound at 15-17% CAGR going forward,” he said.

Given this backdrop, Kant believes quality commodity companies deserve fresh attention.
“This is a good opportunity to accumulate good-quality commodity stocks. One can look at Hindalco, Vedanta and JSW Steel. We still believe there is at least one to one-and-a-half years of the upcycle left,” he added.Lower Crude Prices to Aid Corporate Margins
Kant also expects the sharp decline in crude oil prices to provide a meaningful boost to corporate profitability over the coming quarters.

He noted that while companies may see some impact in the June quarter, the benefits of lower input costs should become much more visible during the second half of the financial year.

“Q2 and Q3 will have the benefit of lower input costs, but price rollbacks never happen. That will support better profitability in the second half of the year,” he said.

He also believes easing tariff concerns and resilient domestic demand have strengthened India’s macroeconomic outlook.

“Our ground checks suggest there has been no let-up in consumption, credit demand or collections. Credit growth itself will be around 17-18%, and these indicators suggest this is the time to be bold with cherry-picking,” Kant said.

Defence Story Remains Intact
Despite recent volatility in defence stocks, Kant remains optimistic about the sector’s long-term prospects. While he is less constructive on Bharat Dynamics, he continues to favour Bharat Electronics (BEL), Hindustan Aeronautics (HAL) and Mazagon Dock Shipbuilders.

Recent selling pressure, he said, has largely been driven by trading positions and news flow rather than any deterioration in fundamentals.

“It is a no-brainer if you are looking from a three-year perspective. HAL, BEL and Mazagon Dock remain strong long-term plays,” he said.

Kant also highlighted the potential of the long-awaited P-75 submarine project, which could significantly expand Mazagon Dock’s order book and transform its growth trajectory.

Cautious on AI-Themed Stocks
On India’s artificial intelligence investment theme, Kant advised investors to separate genuine long-term opportunities from market narratives.

Discussing Sterlite Technologies, he acknowledged the company’s strong order book but questioned the sustainability of its business model.

“There is no IP or moat in the business. It has largely remained a trading play over the last 10-15 years, so we are staying away from the fundamental call,” he said.

Banking Preferred Over Auto and Ancillaries
Among sectors that could benefit from lower crude prices, Kant prefers banking and financial services over automobiles and auto component manufacturers.

While paint companies have already recovered significantly from recent lows, he believes expensive valuations and intense competition limit their upside. Auto and ancillary companies, meanwhile, could struggle because of a high base effect in the second half of the year.

“If you are looking at a one- or two-year perspective, they may find it difficult to deliver 20-25% profitability growth. It is a tactical call to stay away for now,” he said.

Instead, he believes banking remains the strongest indirect beneficiary of improving macroeconomic conditions and lower energy prices, making it one of the preferred sectors for investors over the coming quarters.

Plans to cut prices at family attractions over the summer holidays will be a “wonderful initiative” to help more people visit, a business has said.

Government plans coming into force on Thursday will cut VAT on some tickets to attractions in the UK, with the discount expected to be passed on by businesses to customers.

James Robson, general manager of Birdworld in Farnham, Surrey, said that he hoped the move would make visiting easier for families with less money, but also called for a more lasting initiative to help attractions.

“This opens up accessibility to people who might be feeling the strain over the summer holidays,” he said.

“It’s a wonderful initiative that looks to provide a bit of tax relief through the summer holidays.

“It’s getting more and more expensive to run these attractions, and long term it would be good to see further relief.”