Crude oil prices experienced a notable increase of 4.16%, concluding at Rs 9,485, a movement attributed to enduring geopolitical tensions and supply disruptions associated with the ongoing conflict in Iran. The ongoing closure of the Strait of Hormuz, an essential conduit for global oil transportation, has markedly restricted exports from the Middle East, thereby intensifying bullish sentiment. Nonetheless, the gains experienced were somewhat restrained following the announcement of the United Arab Emirates’ departure from OPEC and OPEC+, which has sparked apprehensions regarding the unity of the producer coalition.
The disruption has heightened concerns regarding a significant supply shock, with forecasts suggesting that energy prices may increase substantially in 2026. At its core, the market continues to exhibit a pronounced sensitivity to supply risks, even in light of burgeoning concerns regarding demand. The International Energy Agency has issued a caution regarding an unparalleled supply shock, whereas Citi anticipates that Brent prices may surge to $150 per barrel should disruptions continue.
Simultaneously, S&P Global has adjusted its 2026 demand growth projection downward by 700,000 barrels per day, attributing this revision to the economic ramifications of the ongoing conflict, with expectations of a decline in demand for Q2. Data from the U.S. Energy Information Administration revealed a complex picture, as crude stocks increased by 1.9 million barrels, whereas gasoline and distillate inventories experienced a significant decline, suggesting robust downstream demand. OPEC has revised its Q2 global demand estimate downward to 105.07 million bpd, while anticipating a recovery in the latter half of the year.
From a technical perspective, the market is experiencing renewed buying activity, as evidenced by a significant increase in open interest, which has surged by 29.3% to reach 15,909. This suggests the entry of new long positions into the market. Crude oil is presently underpinned at Rs 9,214, with a breach beneath this level likely to challenge the Rs 8,943 mark. On the upside, resistance is observed at Rs 9,702, and a movement above this level could lead to further gains towards Rs 9,919 levels.