US-Iran war: Oil prices continued to rise on Tuesday, 28 April, as prospects of a resolution to the US-Iran war remained uncertain, while the vital Strait of Hormuz stayed largely closed, restricting energy supplies from the key Middle East region to global markets.
Brent crude futures for June increased by 45 cents, or 0.4%, to $108.68 per barrel, after surging 2.8% in the previous session to their highest close since April 7. The benchmark has now advanced for seven straight sessions.
Meanwhile, US West Texas Intermediate (WTI) crude for June climbed 58 cents, or 0.6%, to $96.96, following a 2.1% gain in the prior session.
Back home, crude oil on the Multi Commodity Exchange (MCX) also witnessed a similar upward movement. MCX crude oil prices surged as much as 1% to ₹9,201 per barrel on Tuesday.
What’s behind the rally in crude oil prices?
The US-Iran conflict, ongoing for two months now, is showing no signs of ending, keeping crude oil prices elevated. In recent developments, US President Donald Trump has expressed dissatisfaction with Iran’s latest proposal to end the conflict, US officials were quoted as saying by Reuters on Monday.
According to the Reuters report, Iran indicated that Tehran’s plan sidesteps discussions on its nuclear programme until the fighting stops and disputes over Gulf shipping are settled.
Trump’s rejection of the proposal has kept the situation at a stalemate, with Iran halting shipping through the Strait of Hormuz — a critical route that typically accounts for nearly 20% of global oil and gas supplies — while the US continues its blockade of Iranian ports.
Earlier negotiations between the two sides broke down last week after unsuccessful direct talks. Ship-tracking data pointed to major disruptions in the region, with six Iranian oil tankers forced to reverse course due to the US blockade.
Meanwhile, a liquefied natural gas tanker operated by the United Arab Emirates’ Abu Dhabi National Oil Co successfully transited the Strait of Hormuz and is believed to be approaching India, according to ship-tracking data, as quoted by Reuters, on Monday.
Where are crude oil prices headed in the near term?
Kaynat Chainwala, AVP Commodity Research, Kotak Securities, believes that current tensions sustain upward pressure and helped process rebound from session lows. Any credible confirmation that the Strait is reopening would likely trigger a sharp correction.
“As long as Washington and Tehran continue to trade conflicting signals, oil prices will stay highly sensitive to any new developments and prone to sharp price swings in either direction,” Chainwala said.
Meanwhile, on the technical outlook, Ponmudi R, CEO of Enrich Money, said that MCX Crude Oil is currently trading near the ₹8,990 zone, staging a sharp recovery amid geopolitical concerns and climbing back above the ascending trendline.
“Immediate resistance lies at ₹9,185; a sustained close above this level would bring the ₹9,280– ₹9,400 range into focus. On the downside, ₹8,900 acts as immediate support, with ₹8,820 and ₹8,700 as stronger floors should the momentum fade. The near-term bias remains bullish, underpinned by persistent supply disruption concerns in the Strait of Hormuz,” Ponmudi added.
(With inputs from Reuters)
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