Israel launched attacks on Iran’s capital, Tehran, to remove what it described as “an existential threat”. These attacks took place while no agreement was reached between the United States and Iran on the nuclear dispute. America has supported Israel’s attacks. Iran has retaliated against these attacks.
“Uncertainty prevails, fear is pushing up prices today,” Tamas Varga, an analyst at PVM, was quoted as saying by Reuters. “It is entirely driven by the outcome of the Iran nuclear talks and the potential military action the US could take against Iran.”
Citing Barclays Bank, IANS reported that Brent crude could rise to around $80 per barrel in the event of a significant disruption as the market faces a risk premium due to geopolitical tensions, although any rise may not lead to an immediate supply disruption.
Benchmark Brent and US WTI rose more than 3% in the previous session and could extend their gains on Monday when trading resumes.
US WTI crude oil futures ended at $67.29 per barrel, up $2.08 or 3.19% on the session while Brent saw an even sharper rise of 3.4% or $2.37 per barrel to close at $72.87.
Brent and WTI benchmarks are currently trading at their highest levels since July and August. In a video posted on social media, President Donald Trump called the attacks “a major military operation in Iran.” These attacks have started near the office of the Supreme Leader of Iran, Ayatollah Ali Khamenei.
The war-like situation is likely to affect operations through the Strait of Hormuz, a 21-mile waterway that remains an important route for international supplies. Approximately 13 million barrels per day pass through the strait – approximately 31% of all marine crude oil on Earth.
Commodities and currencies expert Anuj Gupta expects a bullish move on Monday, with Brent testing the $75 per barrel mark while WTI is targeting the $70 level.
Crude oil prices rose nearly 5%, or $3.39, in February, while 2026 gains extended to $12.21 per barrel, representing a 20.10% year-to-date increase.
The war premium is expected to grow if the crisis does not exist in time.
Also Read: Iran-Israel Conflict: Expect Gaps to Open in Gold and Silver Here’s how to trade balloons on Monday
Strategy for oil traders
Gupta recommends buying MCX crude oil futures at Rs 5,950-6,000 with a stop loss of Rs 5,750 and a target of Rs 6,350-6,500.
Influence of equity markets
Higher crude oil prices are expected to be an emotional negative for domestic equity markets when trading resumes on Monday.
A level above $80 per barrel could be a strong negative, said Kranti Bathini, head of equity strategy at WealthMills Securities. He expects bad business on Monday, expecting a sharp decline that may persist for the near term.
India’s benchmark indices Nifty and BSE Sensex, ended sharply lower on Friday amid selling pressure across the board. Auto, financials and FMCG were the big laggards while the IT sector saw the best buying action. In a volatile session, the broader Nifty closed by 317.90 points or 1.25% at 25,178.65, while the 30-share Sensex fell by 961.42 points or 1.17% at 81,287.
Sectors in focus
Oil marketing companies like Indian 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 OMCs’ clearing margins, hurting their bottom lines.
Besides, stocks of tires and paints are also coming under pressure. Crude oil is a key source of raw materials for both paint and tire companies as most of their inputs are petroleum-based derivatives.
Also Read: Iran-Israel standoff likely to lead to bad trade on Monday What should investors do?
((rejection: The recommendations, suggestions, opinions and views given by the experts are their own. (It does not represent the views of The Economic Times.)
