Crude oil futures fall as West Asia shipping improves

Crude oil futures fell nearly 3 per cent on Friday as improved tanker movement through key West Asia shipping routes eased immediate supply concerns. However, geopolitical risks remained, with analysts citing continued uncertainty over Kazakhstan's exports and regional tensions

New Delhi: Crude oil futures fell 3 per cent to Rs 7,811 per barrel on Friday, tracking weak global benchmarks as improving tanker movement through key West Asia shipping routes eased concerns over immediate supply disruptions despite lingering geopolitical risks.

On the Multi Commodity Exchange (MCX), crude futures for August delivery depreciated by Rs 226, or 2.81 per cent, to Rs 7,811 per barrel.

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Similarly, the September contract also dipped by Rs 190, or 2.43 per cent, to Rs 7,616 per barrel on the commodities bourse.

Traders said signs of improving oil shipments through the Strait of Hormuz and the Bab el-Mandeb Strait reduced the geopolitical risk premium in crude, prompting selling in domestic futures.

“MCX crude oil prices declined on Friday, tracking weakness in the energy market as crude shipments through key West Asia maritime routes improved despite limited progress in US-Iran negotiations,” said Pinky Yadav, Commodity Fundamental Analyst at Choice Broking.

In the international markets, Brent crude futures for September delivery declined by USD 1.81, or 2.03 per cent, to USD 87.22 per barrel on the Intercontinental Exchange.

West Texas Intermediate crude for the September contract also slipped by USD 1.80, or 2.15 per cent, to USD 81.79 per barrel on the New York Mercantile Exchange.

Yadav said crude prices weakened globally after tanker traffic through the Strait of Hormuz increased, with more vessels transporting millions of barrels of oil. At the same time, Saudi tankers also resumed movement through the Bab el-Mandeb Strait.

According to Kpler shipping data, 25 commodity vessels transited the Bab el-Mandeb Strait on Thursday, though traffic through the Strait of Hormuz remained limited to two tankers.

Analysts said the improvement in shipping activity followed last week’s threat by Yemen’s Houthi to blockade Saudi vessels, which had briefly pushed crude prices above the USD 100-per-barrel level.

However, concerns over global supply disruptions persisted after fresh strikes again halted crude loadings at Kazakhstan’s key Black Sea export terminal, Yadav said.

She added that Saudi Arabia has proposed an international maritime coalition involving representatives from 43 countries to safeguard Red Sea shipping following the Houthi blockade.