Crude oil prices concluded the trading session with a slight decline of 0.45% at Rs 9024, as market participants continued to evaluate the geopolitical dynamics related to the ongoing US-Iran conflict. Sentiment exhibited a degree of stability following US President Donald Trump’s assertion that the ceasefire with Iran remained in effect, notwithstanding the resurgence of military confrontations in the Strait of Hormuz. US Central Command has confirmed that American forces executed strikes on Iranian military targets following Tehran’s fire directed at US destroyers, with officials underscoring that there is no intention to pursue a wider escalation. Trump subsequently affirmed that US vessels successfully navigated the strait without incurring any damage, alleviating immediate supply apprehensions.
Oil markets exhibited significant sensitivity to developments surrounding the Strait of Hormuz, which has been effectively restricted since late February, thereby disrupting global crude trade flows and necessitating regional production shutdowns. The International Energy Agency has estimated that approximately 14 million barrels per day of the global oil supply have been impacted by the ongoing conflict. Further backing was provided following remarks from US Energy Secretary Chris Wright, who indicated that Iran might have curtailed crude production by approximately 400,000 barrels per day as a result of increasing storage constraints and export limitations.
In the interim, new instability has surfaced in Libya following the declaration of an emergency at the Zawiya refinery, coinciding with clashes in the vicinity. In terms of inventory, US crude stocks experienced a decrease of 2.314 million barrels, alongside a reduction in gasoline inventories by 2.504 million barrels, indicating an ongoing contraction in fuel supplies. OPEC has revised its global oil demand forecast for the second quarter downward by 500,000 barrels per day, attributing this adjustment to diminished economic activity associated with tensions in the Middle East.
From a technical perspective, the market is experiencing renewed selling pressure, evidenced by a 0.86% increase in open interest, which settled at 10,446, alongside a price decline of Rs 41. Crude oil is now finding support at Rs 8881, with a break below potentially testing Rs 8738 levels. Resistance appears to be situated around Rs 9152, and an upward movement beyond this threshold may drive prices towards Rs 9280.