Crude oil prices experienced a notable increase of 4.5%, concluding at Rs 9,014. This rise is attributed to heightened geopolitical tensions stemming from U.S. military actions in Iran, which have amplified worries regarding possible interruptions to global oil supply routes via the Strait of Hormuz. Market sentiment exhibited significant volatility as optimism for a swift diplomatic resolution diminished following U.S. Secretary of State Marco Rubio’s indication that negotiations with Iran may extend over several additional days.

Iran has confirmed that current discussions are centred on resolving the conflict rather than engaging in nuclear negotiations, which continues to cast uncertainty over regional stability and energy exports. Supply concerns continued to be the primary catalyst for the rally. Barclays has upheld its 2026 Brent crude forecast at $100 per barrel, emphasising that global inventory trends indicate a substantial supply deficit of approximately 6–8 million barrels per day. Ongoing disruptions associated with the conflict persist in impacting deliveries from various oil-producing regions. Meanwhile, OPEC+ members are anticipated to endorse a relatively modest output increase for July, even in the face of elevated prices and ongoing supply concerns.

Support also came from optimistic U.S. inventory data released by the Energy Information Administration. U.S. crude inventories experienced a notable decrease of 7.9 million barrels, bringing the total to 445 million barrels. This decline substantially surpassed market expectations, which had anticipated a more modest reduction. Petrol inventories decreased by 1.5 million barrels, indicating consistent fuel demand, whereas crude stocks at the Cushing delivery hub declined by 1.6 million barrels. However, distillate inventories experienced a modest uptick during the week.

OPEC has adjusted its 2026 global oil demand growth forecast, reducing it to 1.17 million barrels per day from a previous estimate of 1.38 million bpd, attributing this revision to the risks associated with the ongoing conflict in Iran. Technically, the market experienced short covering as open interest decreased by 3.31% to 11,419 lots. Crude oil is maintaining support levels at Rs 8,813 and Rs 8,611, with resistance identified at Rs 9,153, subsequently followed by Rs 9,291.