“Uncertainty is prevalent, fear is driving prices higher today,” Tamas Varga, an analyst at PVM, told Reuters. “It is completely driven by the outcome of the Iranian nuclear talks and possible military action the US could take against Iran.” Quoting Barclays Bank, IANS reports that Brent crude could rise to around $80 per barrel in the event of a significant supply disruption as the market experiences a risk premium due to geopolitical tensions, although an escalation may not necessarily lead to an immediate supply disruption.
Benchmarks Brent and US WTI rose more than 3% last session and could extend their gains on Monday when trading resumes.
US WTI crude futures ended at $67.29 per barrel, gaining $2.08 or 3.19% in one session, while Brent witnessed an even sharper rise of 3.4% or $2.37 per barrel to close at $72.87.
The Brent and WTI benchmarks are currently trading at their highest levels since July and August. President Donald Trump called the attacks a “major combat operation in Iran” in a video released on social media. The attacks took place near the offices of Supreme Leader Ayatollah Ali Khamenei.
The war situation is likely to impact operations through the Strait of Hormuz, a 21-mile-wide waterway that remains a crucial passageway for global supplies. About 13 million barrels per day pass through the Strait – about 31% of all the world’s crude oil.
Commodity and currency expert Anuj Gupta expects a sharp spike on Monday, suggesting Brent will test the $75 per barrel mark, while WTI will scale the $70 level.
Crude oil prices have risen nearly 5% or $3.39 in February, while 2026 gains have been extended to $12.21 per barrel, implying a 20.10% increase for the year to date.
The war premium is expected to rise if the crisis is not contained in time.
Also read: Conflict between Iran and Israel: expect a gap-up opening in gold and silver. Here’s how to trade precious metals on Mondays
Strategy for oil traders
Gupta suggests buying MCX crude futures at Rs 5,950-6,000 with a stop loss of Rs 5,750 and a target of Rs 6,350-6,500.
Impact on the stock markets
High crude oil prices are expected to be sentimentally negative for domestic stock markets when trading resumes on Monday.
Kranthi Bathini, Director-Equity Strategy at WealthMills Securities, said a level above $80 per barrel could be a strong negative. He expects choppy trading on Monday and expects sharp price falls that could last in the short term.
India’s benchmark indices Nifty and the BSE Sensex ended with deep cuts on Friday amid selling pressure across the board. The auto, financial and FMCG sectors remained major laggards, while the IT sector saw selective buying. In a volatile session, the broader Nifty fell 317.90 points, or 1.25%, to close at 25,178.65, while the 30-share Sensex fell 961.42 points, or 1.17%, to settle at 81,287.19.
Sectors in focus
Oil marketing companies like Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation (HPCL) and Oil India Limited could be in the picture and may experience selling pressure if oil prices rise sharply.
High prices impact OMCs’ refining margins and hit their bottom lines.
In addition, tire and paint supplies may also come under pressure. Crude oil is an important raw material source for both paint and tire companies because many of their inputs are petroleum-based derivatives.
Also read: Tensions between Iran and Israel are likely to lead to choppy trading on Monday. What should investors do?
(Disclaimer: The recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times.)
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