Crude oil futures explode as Hormuz crisis deepens alarm

MCX July contract climbed 3.4% to ₹6,932 per barrel after renewed geopolitical tensions raised fears of supply disruptions through Hormuz

Crude oil prices surged sharply on Wednesday after fresh military action between the United States and Iran reignited fears of supply disruptions in the Middle East. The renewed conflict pushed crude oil futures on the MCX to a two-week high, raising concerns about higher fuel costs and inflation if tensions continue to escalate.

The July crude oil contract on the MCX climbed ₹227, or 3.39%, to ₹6,932 per barrel, with a business turnover of 19,697 lots.  This is the highest closing level since June 23, when the contract had settled at ₹6,964 per barrel. The August contract also gained ₹206, or 3.06%, to ₹6,930 per barrel in 2,872 lots.

Fresh conflict shakes oil markets

The rally came after the US carried out additional air strikes in Iran, raising fears that the conflict could spread further across West Asia. The latest escalation has put pressure on the fragile ceasefire agreed through an interim MoU signed only weeks ago.  

   At the same time, the US withdrew a temporary waiver that had allowed Iran to sell crude oil in international markets. The move is expected to tighten global oil supplies, adding further support to prices.  

  According to market experts, concerns have also increased after several attacks on commercial vessels passing through the Strait of Hormuz. Iran reportedly responded by targeting US military facilities in Bahrain and Kuwait, increasing worries about a wider regional conflict. The sharp rise was not limited to Indian markets. International benchmark Brent crude for September delivery jumped $2.56, or 3.45%, to $76.72 per barrel on the ICE exchange. US benchmark  WTI crude for August delivery gained $2.30, or 3.27%, to $72.74 per barrel on the NYMEX.  

   WTI also reached its highest level in nearly two weeks after rising more than 5% during the week. Analysts said the latest US military action and the withdrawal of Iran's oil export waiver have significantly increased concerns about global crude supplies.

Volatility likely to continue

Analysts believe oil prices could remain highly volatile in the coming days as investors closely monitor developments around the Strait of Hormuz. 

    Nearly 20% of the world's oil supply passes through this critical shipping route, making any disruption a major risk for global energy markets. 

  Continued geopolitical uncertainty could keep crude prices elevated and increase pressure on inflation and fuel prices worldwide. —PTI