Crude oil prices experienced a notable increase in the prior session, closing 5.46% higher at Rs 7,316, driven by rising tensions in the Middle East that heightened fears of possible supply disruptions. The current conflict in the region has heightened investor concerns, especially with reported disruptions in shipping via the Strait of Hormuz, a vital artery for global oil transportation. China has reportedly instructed its major refiners to cease exports of diesel and gasoline, heightening concerns regarding the tightening availability of fuel on a global scale.

Despite discussions surrounding vessel insurance proposals and naval escorts aimed at stabilizing shipping activity, market participants continue to exercise caution due to concerns over enduring geopolitical instability. Attention has also been drawn to supply-side developments. Data indicated that Saudi Arabia loaded approximately 10 million barrels of crude from Al-Muajjiz in the initial four days of March, implying a possible rate of 2.5 million barrels per day if this trend continues.

In the interim, tanker movements in the Red Sea indicate preliminary signs of vessel repositioning, notwithstanding the heightened risk present in the region. U.S. inventory data indicated an increase in crude stocks by 3.48 million barrels, reaching a total of 439.3 million barrels, whereas gasoline inventories experienced a decrease of 1.7 million barrels.

From a technical perspective, the market is experiencing short covering, as evidenced by a 6.68% decline in open interest to 15,789 lots, while prices increased by Rs 379. Crude oil is presently encountering support at Rs 7,011, with additional downside support located at Rs 6,707. On the upside, resistance is observed at Rs 7,486, and a sustained movement above this threshold could propel prices towards Rs 7,657.