Crude oil futures tumble nearly 8 per cent on easing West Asia tensions
Crude oil futures on the MCX fell nearly 8 per cent as easing geopolitical tensions between the US and Iran triggered a sharp decline in global oil prices. Analysts, however, warned that risks to oil supplies remain due to continued regional security concerns
New Delhi: Crude oil futures tumbled nearly 8 per cent to Rs 7,939 per barrel on Monday amid hopes of easing geopolitical tensions in West Asia, triggering a selloff in global oil markets and dragging domestic prices lower.
On the Multi Commodity Exchange (MCX), crude futures for August delivery slumped Rs 665, or 7.73 per cent, to Rs 7,939 per barrel in a business turnover of 12,994 lots.
The September contract also tumbled Rs 537, or nearly 7 per cent, to Rs 7,710 per barrel in a business turnover of 1,865 lots.
Traders said the sharp decline mirrored losses in global crude oil markets after Washington and Tehran signalled a pause in military escalation.
“MCX crude oil futures have continued their downward momentum in the domestic market on Monday amid easing concerns over supply disruptions in West Asia,” said Aamir Makda, Commodity & Currency Analyst, Technical Research, Choice Broking.
In the international markets, Brent crude futures for September delivery fell USD 7.66, or 8 per cent, to USD 89.12 per barrel on the Intercontinental Exchange.
West Texas Intermediate (WTI) crude for September delivery declined USD 6.93, or nearly 8 per cent, to USD 82.38 per barrel on the New York Mercantile Exchange.
“Crude has fallen sharply, with Brent dropping as much as 7 per cent to below USD 90 and WTI nearing USD 85 per barrel, after the US quietly suspended its strike campaign late on Friday and Iran indicated over the weekend that it would also halt its attacks as long as Washington does the same,” said Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities.
However, he cautioned that the latest selloff reflects expectations of de-escalation rather than a lasting resolution.
Tanker movements through the Strait of Hormuz remain well below normal. Gulf crude loadings are yet to recover, and Houthi attacks on Saudi oil installations continue to threaten shipping through the Bab el-Mandeb Strait, suggesting the risk at the second chokepoint remains high, Banerjee added.
