Crude futures advance as Mideast tensions keep oil markets on edge

Crude futures may trade with an upward bias as geopolitical uncertainty and supply concerns continue to influence global oil markets

Crude oil futures closed higher on Friday, supported by steady buying in the domestic market as traders maintained a cautious stance amid renewed geopolitical tensions in the Middle East. 

  While international oil prices edged lower during the session, concerns over potential supply disruptions continued to underpin sentiment, keeping both global benchmarks on course for a strong weekly gain.

  On the MCX, crude oil for July delivery settled at ₹6,880 per barrel, up ₹26, or 0.38%. The contract recorded a turnover of 4,594 lots, with dealers attributing the gains to fresh buying interest alongside resilient demand in the physical market.

  Domestic prices outperformed global benchmarks, where traders locked in some profits after a sharp rally earlier in the week. Brent crude futures slipped 0.3% to about $76.11 a barrel, while US West Texas Intermediate (WTI) crude eased 0.3% to around $71.87. Even so, Brent was heading for a weekly gain of nearly 6% and WTI about 5%, reflecting the premium investors continue to place on geopolitical risk.

  The latest moves come after renewed hostilities between the United States and Iran reignited concerns over energy supplies from the Gulf. Although Washington has avoided direct strikes on Iran's oil production and export infrastructure, uncertainty surrounding the conflict has disrupted tanker traffic through the Strait of Hormuz, one of the world's busiest energy corridors. Around one-fifth of global oil and liquefied natural gas shipments pass through the narrow waterway, making any interruption a significant risk for energy markets.

  The IEA warned this week that a prolonged escalation could threaten its expectation of a sizeable global oil surplus next year. The agency noted that although crude shipments recovered after an earlier easing of tensions, fresh military action has once again clouded the outlook for global supplies and inventories.

  US financial media also reported that traders remain focused on the possibility of further disruption to shipping rather than an immediate loss of production. Higher insurance premiums for tankers operating in the Gulf and slower vessel movements have reinforced expectations that crude prices could remain volatile even if physical supplies are not significantly affected.

  Market participants are now awaiting fresh US economic data and further developments in the Middle East for direction. 

—Commodity Desk