Crude oil prices experienced a decline of 3.67%, settling at Rs 8,720, as market participants responded to recent developments related to the conflict in the Middle East and apprehensions regarding potential supply disruptions. The situation intensified following U.S.–Israeli strikes on Iran, leading Tehran to suspend shipping through the Strait of Hormuz, a crucial passage that accounts for approximately 20% of global oil and LNG supplies. Simultaneously, U.S. President Donald Trump advocated for a collective international initiative to safeguard the waterway, contributing to the prevailing uncertainty in energy markets.

Production in the Gulf region has experienced considerable disruption. The United Arab Emirates has experienced a significant reduction in oil output, with a decline exceeding fifty percent, as ADNOC has enacted extensive production shut-ins in response to the persistent conflict and disruptions in shipping. In the interim, Saudi Arabia has curtailed its output by approximately 2 million barrels per day, resulting in a production level of roughly 8 million bpd, in contrast to over 10 million bpd recorded in February.

The International Energy Agency reports that Gulf producers, encompassing Iraq, Qatar, Kuwait, the UAE, and Saudi Arabia, have collectively reduced output by a minimum of 10 million bpd, with the potential for additional declines should shipping routes continue to face restrictions.

From a technical standpoint, the market is experiencing long liquidation, as evidenced by a 20.85% decline in open interest to 11,327 lots, accompanied by a price decrease of Rs 332. Immediate support is identified at Rs 8,425, and a breach beneath this threshold may drive prices down to Rs 8,129. On the upside, resistance is likely near Rs 9,179, with a move above this level potentially testing Rs 9,637.