Technology-related stocks and growing artificial intelligence-related interest have supported markets in Japan and South Korea despite the Iran war, with the Nikkei 225 and Kospi rising more than 10% and 30%, respectively, over the past month.
| Photo Credit: AP

Benchmark Sensex rallied by 940 points on Wednesday (May 6, 2026) following a sharp decline in crude oil prices after U.S. President Donald Trump claimed progress in negotiations with Iran towards an agreement to end the war.

Helped by fag-end heavy buying, the 30-share BSE Sensex jumped 940.73 points, or 1.22%, to settle at 77,958.52. During the day, it surged 1,004.99 points, or 1.30%, to a day’s high of 78,022.78.

The 50-share NSE Nifty rallied 298.15 points, or 1.24%, to end at 24,330.95.

A positive trend in global markets aided the rally in domestic stocks.

From the 30-Sensex firms, InterGlobe Aviation, Trent, Asian Paints, State Bank of India, HDFC Bank, and Eternal were among the major winners.

Reliance Industries, Larsen & Toubro, Power Grid and NTPC were among the laggards.

U.S. President Donald Trump has suspended “Project Freedom,” to escort ships through the Strait of Hormuz, claiming progress in negotiations with Iran towards an agreement to end the war.

In a post on Truth Social on Tuesday (May 5, 2026), Mr. Trump said, “Great progress has been made toward a complete and final agreement with representatives of Iran.”

“Based on the request of Pakistan and other Countries, the tremendous Military Success that we have had during the Campaign against the Country of Iran and, additionally, the fact that Great Progress has been made toward a Complete and Final Agreement with Representatives of Iran, we have mutually agreed that, while the Blockade will remain in full force and effect, Project Freedom (The Movement of Ships through the Strait of Hormuz) will be paused for a short period of time to see whether or not the Agreement can be finalised and signed,” Mr. Trump said.

Project Freedom was launched on Monday (May 4, 2026) to escort ships, stranded due to the closure of the Strait of Hormuz, to safety.

Mr. Trump’s statement on Truth Social came hours after U.S. Secretary of State Marco Rubio announced that Operation Epic Fury, launched on February 28, had concluded as its objectives had been achieved.

“Operation Epic Fury is concluded. We achieved the objectives of that operation. We’re not cheering for an additional situation to occur. We would prefer the path of peace. What @POTUS would prefer is a deal… that is, so far, not the route that Iran has chosen,” Mr. Rubio told a press conference at the White House on Tuesday (May 5, 2026).

Brent crude, the global oil benchmark, tumbled 8% to $101.1 per barrel.

“The trigger was largely global — renewed optimism around a potential U.S.–Iran peace deal led to a sharp decline in crude oil prices, offering immediate relief to an import-heavy economy like India,” K. Hariprasad, Research Analyst and Founder, Livelong Wealth, said.

In Asian markets, South Korea’s benchmark Kospi, Shanghai’s SSE Composite index, and Hong Kong’s Hang Seng index ended higher. Kospi surged over 6%.

Markets in Europe were trading sharply higher. U.S. markets ended in positive territory on Tuesday (May 5, 2026).

Foreign Institutional Investors (FIIs) offloaded equities worth ₹3,621.58 crore on Tuesday (May 5, 2026), according to exchange data.

On Tuesday (May 5, 2026), the Sensex dropped 251.61 points or 0.33% to settle at 77,017.79. The Nifty edged lower by 86.50 points or 0.36% to end at 24,032.80.

Published – May 06, 2026 04:28 pm IST

MEA spokesperson Randhir Jaiswal briefs on West Asia crisis amid Donald Trump escalation.

U.S. President Donald Trump’s move to issue a 60-day Jones Act waiver would lift a ban on foreign-flagged vessels transporting cargo between U.S. ports over this period. File
| Photo Credit: Reuters

Representational image only. File
| Photo Credit: Getty Images/iStockphoto

U.S. President Donald Trump
| Photo Credit: AP

A file image of European Union chief Ursula von der Leyen.
| Photo Credit: AP

International crude oil prices rose on Wednesday following the US downing of an Iranian drone near an American aircraft carrier in the Arabian Sea. The incident unsettled energy markets, though President Donald Trump emphasized that diplomatic channels remain open, with the White House confirming US-Iran talks are still scheduled for Friday, as per reports.

Brent, the global benchmark, rose nearly 1.6% to $67.33 per barrel, while West Texas Intermediate advanced toward $64. Brent is up nearly 11% on a month-to-date basis amid tensions in the Middle East, a source of about a third of the world’s crude.

Adding to tensions, Iranian vessels challenged a US-flagged oil tanker transiting the Strait of Hormuz, the narrow chokepoint that allows ships to enter and exit the Persian Gulf and accounts for about a quarter of the world’s seaborne oil trade. The US Central Command said the elite Iranian Revolutionary Guard Corps harassed the Stena Imperative. 

Iranian media said the country’s naval forces warned a vessel to leave Iranian territorial waters after failing to produce the necessary legal documents.

Moreover, data from the American Petroleam Institute in the US showed crude inventories fell by 11.1 million barrels last week, the largest draw since June if confirmed by official figures.

Elsewhere, oil producers’ cartel OPEC+ expects oil demand to gradually pick up from March or April and will decide on March 1 whether to resume monthly output increases after a first-quarter pause.

ALSO READ: Gold Rallies With Silver As Historic Rout Lures Back Dip Buyers

US President Donald Trump, on the very first day of assuming office, laid out a sweeping plan to maximise oil and gas production, including declaring a national energy emergency to speed the permitting of projects, rolling back environmental protections, suspending new federal offshore wind leasing proposals pending an environmental and economic review, and withdrawing the US from the Paris climate pact. He also signed an executive order reversing efforts by former President Joe Biden to restrict oil and gas drilling in the Arctic and large areas of the US coastline. This is a dramatic U-turn in Washington’s energy policy after former President Joe Biden during his four years in office encouraged a transition away from fossil fuels to clean energy in the world’s largest economy.

President Trump said in his inaugural address, “America will be a manufacturing nation
once again, and we have something that no other manufacturing nation will ever have — the largest amount of oil and gas of any country on earth — and we are going to use it. We will bring prices down, fill our strategic reserves up again right to the top, and export American energy all over the world.”

Crude oil is produced in 32 states in the US and its coastal waters. Texas is by far the largest oil-producing state in the country. In 2023, it produced a total of over 2 billion barrels. Its $172-billion energy sector employed more than 9 lakh energy workers as of 2022. President Trump has already started pushing for an increase in oil and gas production to lower energy costs and drive prices down.

Is it all as simple as it sounds?

Price Is King

The biggest incentive for oil and gas firms to either stimulate oil production or curtail it is usually price. In general, high oil prices push oil companies to produce more, while low prices lead them to pull back. The government has limited power to affect the price of oil as it is controlled by market dynamics. Higher prices may lead to more production, but they also upset consumers who will be forced to pay more at the pump, which will make not only gas but other commodities costlier. In recent years, oil companies have resisted the temptation to significantly invest in expanding drilling when prices rise, embracing instead the ability to sell their oil for a high price. Not all oil reserves can be exploited profitably. Instead of drilling at new locations, many oil companies have focused on extracting every dollar from existing wells.

What could be a solution then?

India Is An Attractive Destination

The answer may lie in the export of products such as Liquefied Natural Gas (LNG). President Trump understands this well, and has thus lifted the previous administration’s freeze on export permits. The decision could lead to almost 100 million metric tonnes per annum (MTPA) of additional LNG being exported by 2031 by projects that are significantly advanced, further cementing the US as the world’s largest exporter of the fuel.

US Senator Ted Cruz has also already introduced legislation to repeal the Biden administration’s Natural Gas Tax in the Inflation Reduction Act. Rolling it back it is an important step towards ensuring affordable, reliable energy for all.

According to Shell’s LNG Outlook 2024, global demand for LNG is expected to increase by more than 50% by 2040. This will be driven largely by the move away from higher-emission fossil fuels, a shift underway in a large country such as India and further along in other emerging markets.

In 2020, China was the United States’ largest oil export destination, while India stood fifth. A year later, the roles had reversed, with India taking the top spot and China going down to fifth. Various factors were responsible, including China imposing tariffs on US imports, the American ban on investments in Chinese energy firms, and the growing demand for LNG in India. A long-term contract worth $10 billion was signed between India and two LNG export terminals in Texas and Louisiana. There are more in the works, with Corpus Christi and Freeport in Texas, along with other Gulf Coast towns.

Why A Complete Repeal Is Not Feasible

In an executive order last week, Trump suspended funding disbursements under the Inflation Reduction Act (IRA), a step part of a sweeping set of directives to begin setting the new administration’s energy agenda. While it is not uncommon for new governments to pause funding for evaluation, federal agencies have 90 days to submit their review and spending recommendations to the Office of Management and Budget and the National Economic Council. The IRA contains key tax subsidies that foster energy production from renewable sources such as solar, hydrogen, wind and others. It also bolsters manufacturers in the supply chain with incentives and investments. Renewable energy manufacturers are eligible for two federal tax credits under the IRA. In addition, the IRA provides support for emerging capabilities, like carbon capture and technologies that facilitate the production, storage and utilisation of hydrogen energy.

While the disbursements may be suspended, it is not prudent to repeal the law in its entirety for several reasons, including the fact that Red states, such as Texas, greatly benefit from it. In general, many renewable energy projects are in rural areas, which usually send Republicans to Congress. For example, Texas has 689 firms engaged in solar manufacturing and distribution, with a $45.2 billion investment as of September 2024, according to the Solar Energy Industries Association report. Thus, there must be a balance against the need to avoid rolling back the considerable stimulus the IRA provided to the economy. 

There is considerable foreign investment in the renewable energy sector in the US. Recently, an India-based solar panel maker established its first American solar module manufacturing and integrated US-made solar cell facility in Texas. The firm is planning to invest $1 billion in the state over the next four years and create over 1,500 jobs when at full capacity. There are several local firms engaged in the supply chain and manufacturing of components needed for renewable energy production on the Gulf Coast. Most of these firms rely on a few benefits provided by the IRA to be sustainable and profitable in the short term. Repealing it will discourage these firms, which have already invested or were planning to invest in renewables manufacturing.

A Need To Co-Exist

Electricity demand continues to soar in America. The accelerated pace of modernisation in all sectors, from technology to transportation to heavy industry, needs electricity as a source of power. Crypto miners and data centres, are all heavy power consumers, as is generative AI technology, which demands immense computational power and energy, often ten times more than standard operations.

Given renewable energy sources are cost-competitive vis a vis fossil fuels, local utility providers may increasingly rely on them to meet the increasing demand. Another factor is that the prices of renewable energy are much less volatile than those of fossil fuels, like natural gas.

All in all, even with the shift in the US political climate, companies, and tech companies especially, can’t completely abandon their commitment to all their stakeholders—employees, customers, and shareholders in the US and abroad—to make their operations sustainable. Currently, 38 states have regulations requiring utilities to obtain a certain percentage of their electricity from renewable sources. It is also important to note that companies are increasingly becoming direct purchasers of power from suppliers, bypassing intermediaries such as utility companies. This trend will support the demand for clean energy providers.

Bottom Line: FDI Is Key

There is a huge potential for foreign direct investment in renewable energy manufacturing in the US, as well as for the export of oil and gas to fast-growing countries such as India. It won’t be surprising if President Trump, being the business-savvy leader he is with his “America First” and “Make in America” vision, strikes a balance for the co-existence of both fossil fuels as well as renewable energy production.

(The author is CEO and founder of ǪuantAi, an investor in Private Equity and an advisory board member of several technology and non-profit firms in the US) 

Image used for representative purpose only.
| Photo Credit: Reuters

Moscow, Riyadh and several other OPEC+ members announced extensions to oil production cuts first announced in 2023 as part of an agreement among oil producers to boost prices following economic uncertainty.

The plan to extend cuts to mid-2024 comes on top of previous cuts to both oil output and exports as some of the world’s largest energy producers drive to push up market rates.

Also Read | Why have key oil producers vowed output cuts?

Saudi Arabia’s energy ministry said it would cut its production by one million barrels per day (bpd) from April to June (Q2), while Russia announced 471,000 bpd of cuts in Q2.

“In order to maintain market stability, these additional cuts will be gradually restored depending on market conditions,” after the end of the second quarter, said Russia’s Deputy Prime Minister Alexander Novak.

The measures for both countries are in addition to a 500,000 bpd reduction announced in April 2023, which runs until the end of 2024.

UAE, Kuwait, Iraq and Kazakhstan followed suit, saying they would extend existing voluntarily cuts till the end of June.

The OPEC+ oil alliance of 22 nations has implemented supply cuts of more than five million barrels per day (bpd) since the end of 2022.

Russia’s invasion of Ukraine in 2022 sent oil prices soaring to $140, raising earnings across the industry.

The West has tried to target Moscow’s energy exports under sanctions imposed over the Kremlin’s offensive in Ukraine, forcing Russia to ramp up supplies to countries like China and India.

Oil prices surged on March 3 in anticipation of the new extension. The US West Texas Intermediate (WTI) passed $80 for the first time since November while the North Sea Brent Crude Barrel hit a month-high $83.55.

Also Read | Why has OPEC+ cut oil production and how will it affect India and the world?

Fragile unity

In 2016 the crude oil producing OPEC alliance, 13 members headed by Riyadh, formed OPEC+ with an additional 10 countries, including Moscow, to ease prices following US competition.

“The whole purpose of OPEC+ was to come up with a wider group so that there is no need for voluntary cuts,” Rystad Energy economist Jorge Leon told AFP, “Everybody contributes and no one is going alone.”

But for almost a year now, Saudi Arabia has done without unanimity due to the lack of agreement among members.

Voluntary cuts, Mr. Leon warned, are a “clear signal that the cohesion of OPEC+ is not great”.

In a surprise move in December, Angola exited the alliance over a disagreement on a decision to cut production, backed by heavyweight Riyadh.

For Mr. Leon, “more countries will need to contribute to official cuts” as part of a joint agreement or risk an increasingly faltering alliance.