MCX Crude Oil Prices Climb Over 1% as Global Tensions Mount
Crude oil prices on India's Multi Commodity Exchange (MCX) jumped more than one percent today. This surge aligns with a rally in international energy markets. Prices hit their highest level since November 2025. The increase stems from heightened worries about potential supply disruptions. These fears center on escalating tensions in Iran.
Price Movements and Key Drivers
MCX crude oil futures traded 1.48 percent higher. They settled at ₹5,414 per barrel. On the global front, Brent crude oil rose 0.78 percent to $64.37 a barrel. US West Texas Intermediate (WTI) crude futures gained 0.84 percent, reaching $60.00.
The rally followed a statement from US President Donald Trump. He announced a 25 percent tariff on goods from countries that conduct business with Iran. Iran is a major producer within the Organization of the Petroleum Exporting Countries (OPEC). The nation currently faces significant anti-government protests. Trump issued a warning about possible military action in response to violence against demonstrators.
Analyst Insights on Supply Risks
Rahul Kalantri, Vice President of Commodities at Mehta Equities Ltd, commented on the situation. He noted that Trump's warning of potential military action intensified concerns. Markets now fear for Middle East stability and possible disruptions to Iranian oil exports. Iranian supply is a crucial component of the global oil market.
"Additional supply risks emerged from Kazakhstan," Kalantri added. "Production there was impacted by adverse weather, maintenance problems, and damage to Russian infrastructure. This damage is linked to Ukrainian drone attacks. These factors reinforce bullish sentiment in oil markets."
Venezuela's Potential Return to Exports
Markets are also dealing with another concern. They anticipate additional crude supply from Venezuela. Following the ouster of President Nicolas Maduro, Trump stated last week that the government in Caracas plans to hand over oil to the US. This could involve as much as 50 million barrels of oil currently under Western sanctions.
Crude Oil Price Outlook and Technical Levels
Jigar Trivedi, Senior Research Analyst at Reliance Securities, shared his view. He believes the trend for crude oil prices may stay positive in the coming weeks.
"Support for MCX crude oil price is seen at the ₹5,350 level," Trivedi said. "Resistance is placed at ₹5,800. For WTI crude, support is likely at $58, with resistance at $65."
Kalantri expects crude oil prices to remain volatile in today's session. He provided specific levels. "Crude oil price has support at $58.70 to $57.80. Resistance is at $60.20 to $60.90. On MCX, crude oil price has support at ₹5,280 to ₹5,210. Resistance sits at ₹5,415 to ₹5,485."
Impact on the Indian Economy and Stock Market
India imports about 89 percent of its crude oil needs. A significant portion of this supply, roughly 45 to 50 percent of crude oil and 54 percent of Liquefied Natural Gas (LNG) imports, passes through the Strait of Hormuz. Any disruption in this region poses not just a price risk but a direct physical threat to supply.
Estimates suggest every $10 increase in crude oil price widens India's trade deficit by approximately 0.3 percent of GDP. This puts immediate downward pressure on the Indian rupee. Retail inflation is directly impacted. The Consumer Price Index (CPI) could rise by 25 to 30 basis points.
Aamir Makda, Commodity & Currency Analyst at Choice Broking, explained the rupee's vulnerability. "The Rupee is currently around ₹90 to ₹91 against the US Dollar. A prolonged conflict could drive it to ₹93-95," he said. He cited three key factors:
- Import-Led Depreciation: High oil prices increase demand for Dollars.
- 'Twin Deficit' Threat: Necessary government subsidies may affect both Fiscal and Current Account Deficits.
- RBI Intervention Limits: The Reserve Bank of India may allow a managed depreciation, increasing volatility.
According to Makda, foreign portfolio investors (FPIs) are likely to react. They may exit sectors sensitive to oil prices, like Aviation and Chemicals. Instead, they might shift investments to more defensive sectors such as IT and Pharma. However, these sectors are not immune and can also be impacted by global economic downturns.
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