Crude oil prices experienced a decline of 3.1%, settling at Rs 6,854, as traders took the opportunity to book profits following a recent rally that was fuelled by rising geopolitical tensions in the Middle East. Despite the correction, market sentiment continued to exhibit a pronounced sensitivity to developments related to the renewed conflict between the United States and Iran. The U.S. military has confirmed a second consecutive day of strikes on Iranian targets, while Iran has retaliated by targeting U.S. military bases in the region.

President Donald Trump announced that the ceasefire has effectively concluded and cautioned about further military measures, which may include a potential blockade and possible strikes on Iran’s Kharg Island export terminal, thereby maintaining a strong emphasis on concerns regarding global oil supply disruptions. Shipping activity through the Strait of Hormuz has been significantly constrained, with tanker traffic approaching a complete halt due to increased security risks. The disruption continued to raise concerns over global crude supplies, even as HSBC adjusted its Brent crude price forecast to $80 per barrel for 2026 and $65 per barrel for 2027.

This revision is predicated on the expectation that Gulf oil exports will gradually normalise by the end of September. U.S. inventory data revealed a nuanced perspective. Crude oil inventories experienced a decline of 3.775 million barrels, albeit the reduction fell short of market expectations. Petrol inventories also declined, suggesting robust fuel demand, whereas distillate inventories rose unexpectedly. Crude stocks at Cushing experienced an uptick for the first time in a decade, refinery utilisation saw an enhancement, and net crude imports witnessed an increase.

Meanwhile, OPEC+ has confirmed an increase in production targets from August, indicating a willingness to boost supply despite persistent logistical challenges in the Gulf. Crude oil is currently experiencing long liquidation, evidenced by a 6.15% decrease in open interest in conjunction with falling prices. Immediate support is identified at Rs 6,746, with subsequent support at Rs 6,638, while resistance is established at Rs 7,053. A sustained move above this level could extend gains toward Rs 7,252.