US-Iran war: Oil prices surged over 6% on Monday, recovering from a steep drop of more than 9% on Friday, after reports that the Strait of Hormuz had been shut once again. The closure followed mutual accusations from the US and Iran of breaching their ceasefire by attacking on ships over the weekend.
Brent crude futures climbed $6.11, or 6.76%, to reach $96.49 per barrel by 2327 GMT, while US West Texas Intermediate rose $6.53, or 7.79%, to $90.38 a barrel.
Back home, crude oil prices also followed the similar upward movement, tracking global rates. MCX crude oil prices jumped 6% to ₹8,233 per barrel.
What’s driving crude oil prices?
The US military intercepted and took control of an Iranian cargo vessel that attempted to breach its blockade, US President Donald Trump said on Sunday. Meanwhile, Iran announced it would skip a second round of peace negotiations, despite Trump’s warning of possible renewed airstrikes.
The United States has continued enforcing its blockade on Iranian ports. In response, Iran has alternated between lifting and reinstating its own restrictions on the Strait of Hormuz, which had facilitated about one-fifth of global oil shipments before the conflict began nearly two months ago.
On Friday, both contracts recorded their steepest single-day losses since April 18 after Iran stated that all commercial vessels could pass through the Strait of Hormuz during the remaining ceasefire period. Trump also said Iran had committed to keeping the strait open permanently.
According to a Bloomberg report, Iran has indicated it may opt out of another round of talks this week as long as the US naval blockade remains in place, intensifying tensions that had briefly eased on Friday and driven a broad stock market rally.
Over the weekend, the situation escalated further when the US Navy fired at and boarded an Iranian-flagged cargo ship in the Gulf of Oman—marking the first such seizure under the current blockade of the Strait of Hormuz.
Crude oil prices outlook
According to Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities, crude is likely to remain purely headline-driven, with geopolitical developments dictating intraday volatility until the deadline.
“From a technical standpoint, the $90 per barrel level serves as a crucial support zone. A sustained hold above this mark could provide a base for consolidation, while any decisive breach may trigger sharper downside pressure. On the upside, resistance is seen at $100 per barrel — a psychological barrier that could cap near-term rallies — followed by a stronger hurdle at $104 per barrel. A breakout above these levels would require a significant positive catalyst, most likely stemming from geopolitical escalation or supply disruptions,” Banerjee said.
On the other hand, Ponmudi R, CEO of Enrich Money, said that MCX Crude Oil futures witnessed a highly volatile week, plunging sharply from the highs near ₹9,850 to a weekly low of ₹7,258 before settling near the ₹7,725 zone amid easing Middle East tensions.
“The aggressive sell-off has decisively broken the ascending trendline structure, shifting the near-term bias firmly in favor of sellers. On the upside, immediate overhead resistance at ₹8,119– ₹8,200 expected to cap any recovery attempt, and a stronger supply cluster at ₹8,539– ₹8,750 requiring a decisive breakout to revive bullish sentiment. On the downside, immediate support is positioned near ₹7,224, with deeper demand around ₹6,678 should selling pressure persist. The broader trend remains bearish unless price reclaims and holds above ₹8,750 on a closing basis,” Ponmudi said.
(With inputs from agencies)
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