- Crude oil prices surge nearing $100; US-Iran ceasefire extended.
- Strait of Hormuz restrictions limit supply, driving market caution.
- India’s crude oil futures decline amid global price rise.
Global crude oil prices moved higher on Wednesday, hovering close to the $100 per barrel mark, as markets assessed the evolving dynamics between the United States and Iran. While US President Donald Trump announced an extension of the fragile ceasefire, continued restrictions in the Strait of Hormuz kept supply concerns firmly in focus.
According to IANS, Brent crude futures were trading at $99.29 per barrel, up 0.82 per cent, while US West Texas Intermediate (WTI) gained 1.15 per cent to $90.71. Both benchmarks had already risen around 3 per cent in the previous session, indicating sustained upward momentum.
Ceasefire Extension Offers Limited Relief
Market sentiment remains cautious despite the extension of the ceasefire. President Trump indicated that the truce would continue indefinitely to allow room for further negotiations, moving beyond the earlier two-week timeline.
However, the extension has not translated into a full normalisation of energy flows. Traders continue to weigh the risk of disruption, particularly as geopolitical tensions remain unresolved.
In a social media post, Trump said Iran was “collapsing financially” and claimed the country was losing $500 million a day, suggesting that Tehran may be under pressure to reopen the Strait of Hormuz.
Hormuz Remains A Key Bottleneck
The Strait of Hormuz continues to be the central factor driving market caution.
Despite the ceasefire, the US naval blockade remains in place, and shipping activity through the critical route is still constrained. Reports indicate that vessel movement has been minimal over the past 24 hours.
The waterway is vital to global energy markets, accounting for nearly 20 per cent of worldwide oil and gas flows. Any prolonged disruption has immediate implications for supply and pricing.
Adding to uncertainty, Iran has indicated that it may attempt to break the blockade, raising the risk of further escalation.
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Domestic Markets Reflect Global Unease
In India, crude oil futures on the Multi Commodity Exchange (MCX) showed a slight decline, diverging from global trends. Prices fell to an intraday low of Rs 8,382, down 0.65 per cent or Rs 55 from the previous close as of around 10:30 am.
The divergence suggests that while global benchmarks remain elevated, local market dynamics and profit-booking may be influencing domestic price movements.
Equity Markets Under Pressure
The uncertainty in energy markets also weighed on equities.
Domestic indices traded lower, with the Sensex and Nifty both declining around 1 per cent. Selling pressure was visible across key sectors, including information technology, banking and automobiles.
Stocks such as Infosys, HCL Tech, Tech Mahindra, ICICI Bank, HDFC Bank, Eicher Motors and Mahindra & Mahindra were among those facing declines.
