Crude oil prices experienced a notable increase of 8.01%, concluding at Rs 7,360, driven by rising geopolitical tensions in the Middle East that intensified apprehensions regarding global energy supplies. Iran has intensified missile strikes on Gulf nations in response to renewed U.S. military actions, heightening concerns over potential disruptions to oil shipments via the Strait of Hormuz, a crucial global energy transit corridor. While Iran declared the strait closed following an alleged shipping violation, U.S. President Donald Trump asserted that commercial traffic remains open.

The ongoing uncertainty in the region has markedly elevated the geopolitical risk premium associated with crude oil prices. Fundamentally, the International Energy Agency reported that global oil supply increased by 4.1 million barrels per day in June, although production remains significantly below pre-war levels. The U.S. Energy Information Administration anticipates a gradual recovery in Middle East production, with the majority of disrupted output expected to return by the first quarter of 2027. It also predicts that oil markets will transition back into a state of oversupply as inventories accumulate, exerting downward pressure on prices in the medium term.

OPEC+ has reached a consensus to elevate production targets by 188,000 barrels per day starting in August, maintaining its incremental supply augmentation in the face of persistent regional disruptions. Meanwhile, CFTC data indicated that money managers decreased net long crude positions by 19,507 contracts, illustrating a cautious investor sentiment. U.S. inventory data indicated a decrease in crude oil stocks by 3.775 million barrels, alongside a decline in gasoline inventories, suggesting a consistent demand for fuel. However, distillate inventories increased, Cushing crude stocks posted their first weekly build in nine weeks, and net crude imports rose, presenting a mixed supply picture.

Crude oil is currently experiencing short covering, as evidenced by a decline in open interest of 11.35% in conjunction with a significant price rally. Immediate support is positioned at Rs 7,069, succeeded by Rs 6,779. Resistance is identified at Rs 7,538, and a sustained breakout above this threshold may propel prices toward Rs 7,717.