Oil prices rise after conflict in West Asia escalates
Crude oil futures rose to a one-month high of Rs 7,642 per barrel on Tuesday after the US military carried out a third consecutive round of strikes on Iran, heightening fears of supply disruptions through the Strait of Hormuz.
On the Multi Commodity Exchange (MCX), crude oil for July delivery climbed by Rs 282, or 3.83 per cent, to Rs 7,642 per barrel in a business turnover of 15,479 lots.
Similarly, the August contract has also advanced Rs 240, or 3.25 per cent, to Rs 7,634 per barrel in 7,739 lots.
Both contracts have rallied nearly 12 per cent in the past two sessions and are trading at their highest levels in about a month. MCX crude for July delivery hovered around these levels on June 15, when it traded at Rs 7,522 per barrel.
Traders said mounting geopolitical tensions in West Asia have reignited concerns over the security of oil supplies from the Gulf, prompting aggressive buying in crude futures.
“Crude oil prices have hit their four-week high in the domestic markets amid the escalating conflict in West Asia,” said Aamir Makda, Commodity & Currency Analyst, Technical Research at Choice Broking.
Globally, Brent crude futures for the September contract rose $1.43, or nearly 2 per cent, to $84.73 per barrel on the ICE, while West Texas Intermediate (WTI) for August delivery advanced $2.28, or 2.92 per cent, to $80.42 per barrel. Both benchmarks surged more than 11 per cent over the past two sessions to their highest levels in about a month. Brent had last traded at $82.24 per barrel, while WTI had touched $83.35 per barrel in mid-June.
The rally gathered pace after the US armed forces conducted a third consecutive night of strikes on multiple Iranian military installations, under President Donald Trump’s direction. In a post on X, the US Central Command (CENTCOM) said it “began launching the third consecutive night of strikes against Iran, at the Commander in Chief’s direction”.
Meanwhile, Iran retaliated and launched strikes on American-linked assets in Kuwait, Jordan, and Bahrain. Later, the two tankers in the Strait of Hormuz were also hit by fire. Earlier, Trump announced a 20 per cent security charge on cargo transiting the Strait of Hormuz to cover maritime security costs.
The US military said it would begin enforcing the measures on Tuesday by targeting Iran-linked vessels traffic while allowing neutral commercial ships to continue using the strategic waterway. Analysts said investors remain concerned that any further escalation could disrupt crude flows through the shipping lane, which carries nearly a fifth of global oil consumption, tighten supplies and keep energy supplies elevated.
