US-Iran war: Oil prices surged after US President Donald Trump dismissed Iran’s terms aimed at ending the Middle East conflict, raising concerns over the continued closure of the strategically important Strait of Hormuz.
Brent crude futures jumped as much as 4.2% to $105.54 a barrel, while West Texas Intermediate climbed above $99 per barrel.
Back home, crude oil prices witnessed a similar upward movement on Monday, tracking global prices. MCX crude oil prices rose as much as 5.51% to ₹9,471 per barrel on 11 May.
Why are crude oil prices rising?
In a social media post, Trump called the response “TOTALLY UNACCEPTABLE” as both sides struggled to uphold a fragile ceasefire following repeated escalations in tensions.
According to a Reuters report, Trump is expected to meet Chinese President Xi Jinping this week, with US officials indicating that concerns over China’s position on Iran will likely feature in the discussions. Talks are expected to cover the revenue China earns from Iran as well as potential Chinese arms exports to the country.
The conflict, which erupted in late February, has led to a near shutdown of the Strait of Hormuz, severely disrupting global supplies of crude oil, natural gas, and fuels. The resulting supply crunch has driven energy prices higher and intensified inflationary pressures. The International Energy Agency said the conflict has caused the largest supply shock on record.
According to a Wall Street Journal report, Iran proposed moving a portion of its highly enriched uranium stockpile to a third country but refused to dismantle its nuclear facilities. Tehran later denied the claims, as reported by the semi-official Tasnim News Agency.
Meanwhile, a drone strike on Sunday briefly set a cargo vessel ablaze off the coast of Qatar in the Persian Gulf, marking the latest attack on shipping lanes since the ceasefire came into effect in early April. The United Arab Emirates and Kuwait also reported intercepting hostile drones.
Reuters quoted Amin Nasser, CEO of Saudi Aramco, as warning on Sunday that markets may remain unstable until 2027 if disruptions to shipping through the Strait of Hormuz persist for several more weeks. To offset supply disruptions, the company has redirected part of its oil exports through its Yanbu port on Saudi Arabia’s western coast.
Crude oil prices near-term outlook
According to Ponmudi R, CEO of Enrich Money, crude oil continues to experience elevated intraday volatility as traders assess potential supply disruption risks alongside evolving diplomatic developments, leaving the energy complex highly sensitive to geopolitical headlines.
On the technical outlook, Ponmudi said that MCX Crude Oil traded in a highly volatile yet consolidative range during the recent sessions, after witnessing a sharp decline from highs above the ₹10,000 mark earlier in the week, it is currently consolidating near the ₹8,900– ₹9,100 zone after recovering sharply from lows near ₹8,400 zone.
“The rebound is facing resistance at higher levels, reflecting cautious sentiment amid ongoing Middle East tensions. Technically, ₹9,150– ₹9,250 acts as an immediate resistance zone; a sustained move above this band could extend recovery toward ₹9,600– ₹9,800. On the downside, ₹8,800 remains immediate support, followed by a stronger base near ₹8,500. A break below these levels could revive bearish momentum. The near-term outlook remains cautious and highly headline-driven, with volatility likely to persist amid developments around the Strait of Hormuz,” he added.
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