US-Iran Tensions Spark Surge in Crude Oil Futures to Three Percent

Crude oil futures have surged to a three percent gain in the fourth consecutive session, reaching Rs 8,216 per barrel on the Multi Commodity Exchange (MCX). The rise was driven by fresh US-Iran military strikes that stoked fears of disruption to energy supplies through the Strait of Hormuz. On the MCX, crude oil for September delivery jumped by Rs 232 or 2.91 percent, while the October contract advanced by Rs 100 or 1.27 percent.

The escalation in tensions between the US and Iran has put the world's most important oil chokepoint back at the centre of market participants' attention. According to Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, 'Mining the strait has always been this market's single biggest fear, because mines do not distinguish between flags and take months to clear, even the preparation is enough to reprice risk.'

In international markets, Brent oil futures for November delivery rose $2.88 or 3.3 percent to $90.98 per barrel on the Intercontinental Exchange. The West Texas Intermediate (WTI) crude for October contract went up by $2.37 or nearly three percent to $85.77 per barrel on the New York Mercantile Exchange.