Global crude oil prices hit four-week high amid escalating US-Iran conflict

New Delhi: Global crude oil prices climbed around 3 per cent on Tuesday, touching their highest levels in four weeks, after the United States reinstated its naval blockade of Iran and fresh military exchanges around the Strait of Hormuz heightened fears of disruptions to global crude supplies.

International benchmark Brent crude surged as much as 2.82 per cent or $2.35 to trade above $85 per barrel, while US West Texas Intermediate (WTI) crude rose nearly 3 per cent or $2.28 to $80.42 per barrel.

In the domestic market, MCX crude oil futures jumped 4.51 per cent or Rs 332 to Rs 7,692, hitting an intraday high as of 11:08 am.

The latest rally followed a nearly 10 per cent jump in Brent prices in the previous session — the biggest single-day gain since May 2020 — as escalating geopolitical tensions reignited concerns over the security of energy supplies from the Persian Gulf.

Analysts said crude oil prices are likely to remain volatile as geopolitical tensions continue to drive market sentiment.

“Crude oil prices have hit a four-week high amid the escalating Middle East conflict. The US launched its third straight night of strikes on Iran following President Donald Trump’s announcements of a multi-day wave of attacks and a fresh blockade on Iranian trade in the Strait of Hormuz,” they said.

They added that the MCX crude oil July futures contract opened nearly 4 per cent higher at 7,654 and is heading towards its immediate resistance at 7,729, corresponding to the 200-day exponential moving average (EMA) on the four-hour chart.

“A breakout above 7,729 could accelerate the uptrend, with the next hurdle at 8,000 during the session. On the downside, key support levels are placed in the 7,400-7,260 range,” according to them.

US President Donald Trump announced that Washington had reimposed its blockade of Iranian shipping and said countries benefiting from US protection of commercial shipping through the Strait of Hormuz would be expected to compensate the United States for the operation.

Reports claim that Iran intensified its military response by launching drones targeting US assets in Kuwait and firing cruise missiles at what it described as a hostile vessel.

However, Tehran declared that its agreement with Washington had entered a crisis phase and said it would no longer honour the deal as long as the US continued to violate its commitments.

IANS