Israel launched attacks on Iran’s capital Tehran, which it called an “existential threat”. The attacks come as talks between the US and Iran on nuclear de-escalation have failed to reach an agreement. America has supported Israel’s attack. Iran has responded to the attack.
“Uncertainty prevails, fear is driving prices higher today,” Tamas Varga, an analyst at PVM, was quoted as saying by Reuters. “It is entirely driven by the outcome of the Iranian nuclear negotiations and the potential military action the US may take against Iran.”
Citing Barclays Bank, IANS reported that Brent crude could rise to around $80 per barrel in the event of any significant supply disruption as the market is experiencing a risk premium due to geopolitical tensions, although any rise may not necessarily lead to an immediate supply disruption.
Benchmark Brent and US WTI jumped more than 3% in the previous session and could extend their gains on Monday when trading resumes.
Live events
US WTI crude oil futures ended at $67.29 a barrel, up $2.08, or 3.19% in the session, while Brent rose a sharper 3.4%, or $2.37, to settle at $72.87 a barrel.
Brent and WTI benchmarks are currently trading at their highest levels since July and August.
In a video released on social media, President Donald Trump called the strikes “a major military action in Iran.” The strike was launched near the office of Supreme Leader Ayatollah Ali Khamenei.
The war-like situation is likely to affect operations through the Strait of Hormuz, a 21-mile-wide waterway that is a critical route for global supplies. About 13 million barrels pass through the strait every day – about 31% of all marine crude oil on Earth.
Commodity and currency expert Anuj Gupta expects a sharp rally on Monday, indicating that Brent tests the $75 per barrel mark while WTI scales the $70 level.
Crude oil prices rose nearly 5%, or $3.39, in February while extending 2026 gains to $12.21 a barrel, representing a 20.10% year-to-date gain.
The war premium is expected to increase if the crisis is not contained in time.
Also Read: Iran-Israel conflict: Expect gap-up opening in gold and silver Here’s how to trade bullion on Monday
Strategies for oil traders
Gupta Rs. 5,750 with a stop loss of Rs. 5,950-6,000 suggests buying MCX crude oil futures and Rs. 6,350-6,500 targets.
Impact on equity markets
Higher crude oil prices are expected to remain sentimentally negative for domestic equity markets when trading resumes on Monday.
A level above $80 per barrel could be a strong negative, said Kranti Bathini, director-equity strategy at WealthMills Securities. He expects a choppy trade on Monday, anticipating sharp cuts that could remain in the near term.
India’s benchmark indices Nifty and BSE Sensex ended with deep losses on Friday amid selling pressure across the board. Auto, financials and FMCG were on a large scale 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 shed 961.42 points, or 1.17%, to settle at 81,927.
Sector in focus
Oil marketing companies like Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation (HPCL) and Oil India Limited may be in focus and may see selling pressure if oil prices rise sharply.
Higher prices affect the refining margins of OMCs, affecting their bottom line.
Additionally, tires and paint stock can also come under pressure. Crude oil is a major raw material source for both paint and tire companies as many of their inputs are petroleum-based derivatives.
Also Read: Iran-Israel tensions likely to trigger choppy trade on Monday What should investors do?
(disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. (These do not represent the views of the Economic Times.)
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