Crude oil concluded the trading session with a notable increase of 4.75%, reaching Rs 8,536. This surge was driven by heightened tensions stemming from renewed military exchanges between the U.S. and Iran, which have amplified worries regarding potential disruptions to energy supplies and shipping routes through the Strait of Hormuz. Rising geopolitical tensions have heightened the risk of extended interruptions to crude flows from the Persian Gulf, as U.S. President Donald Trump has threatened additional strikes against Iran following the first exchange of fire between the two sides in over a month. Iran’s President Masoud Pezeshkian asserted that the nation was not pursuing conflict but would react to acts of aggression, thereby maintaining elevated uncertainty in energy markets.

Japan has announced that it will not undertake any further releases from its national crude reserves in September and October. Additionally, crude procurement for September is anticipated to decrease to approximately 80% of the average monthly volume from the previous year, as tankers are being redirected through the longer Suez route due to shipping risks associated with the Bab el-Mandeb Strait. Speculative positioning exhibited a mixed trend, as the aggregate net long positions in Brent and WTI declined to 333,914 contracts, marking a three-week low.

In contrast, NYMEX WTI net longs experienced an uptick of 538 contracts, rising to 104,573 and achieving a four-week high. U.S. crude inventories saw an increase of 95,000 barrels, reaching a total of 428.9 million barrels for the week ending August 21. This figure fell short of expectations, which had anticipated a rise of 597,000 barrels. Cushing stocks increased by 1.2 million barrels, while refinery utilisation rose by 0.2 percentage points to 97.4%. Petrol inventories decreased by 2.5 million barrels to 206.8 million barrels, while distillate stocks dropped by 2.2 million barrels to 103.4 million barrels, suggesting robust demand for refined products. Meanwhile, OPEC has revised its 2026 global oil demand growth forecast downward to 580,000 barrels per day, representing the fourth consecutive reduction.

However, it has increased its outlook for demand growth in 2027. From a technical perspective, the market is experiencing renewed buying activity, as evidenced by a 41.58% increase in open interest to 14,169 contracts, alongside a price increase of Rs 387. Crude oil is currently finding support at Rs 8,292, and a decline below this threshold may result in a drop to Rs 8,048. On the upside, resistance is positioned at Rs 8,669, and a sustained movement above this threshold could drive prices toward Rs 8,802.