Oil prices jumped 6% on Wednesday as renewed tensions in the Middle East revived supply concerns. US President Donald Trump has declared the interim ceasefire with Iran is effectively over.
Brent crude futures were quoted around the $79 per barrel mark, while the US contract for oil, West Texas Intermediate, was trading near the $75 per barrel level. These developments have pushed Brent up 11%, while WTI has gained over 10% from the previous week’s levels.
Trump states MoU with Iran nearly over
During the NATO Summit in Turkey, Trump remarked that the MoU signed with Iran is “over.” However, he added that the US was still open to negotiating with Iran. These mixed comments added to the uncertainty surrounding the transit of commercial vessels through the Strait of Hormuz.
Prior to the war, which started in late February, the waterway passage was used to ship nearly 20% of global crude and LNG supplies. In a social media post on X, US Central Command said, “Forces have begun launching a series of powerful strikes against Iran to impose heavy costs for targeting and attacking commercial shipping crewed by innocent civilians in an international waterway.”
They added that the strikes came in retaliation for three commercial vessels targeted by Iranian forces while moving through the Hormuz passage. “Iran’s demonstrated aggression was unwarranted, dangerous, and a clear violation of the ceasefire,” the post read.
MCX Crude advances 7%
Following these geopolitical developments, crude oil futures for July rose over 7% on the Multi Commodity Exchange (MCX), quoted near the Rs 7,182 per barrel mark. Despite the price hike, analysts cite that India’s oil markets stand strong. “India imported 4.93 million bpd of crude in June, the highest June volume on record despite heightened geopolitical tensions in the Middle East,” said Kpler analyst Sumit Ritolia in a LinkedIn post.
He added that Russian crude imports also advanced to nearly 2.6 million barrels per day, making Russia the country’s largest oil supplier. Ritolia noted that Indian suppliers had already procured cargoes, and the increase in exports from countries like Africa, Russia, and Venezuela, coupled with higher OPEC+ production, provides India with ample sourcing options.
