Crude Oil Prices Steady Amid Renewed US-Iran Tensions, Brent Expected to Rise to $120 per Barrel

US-Iran Conflict Continues to Disrupt Global Oil Supplies

The ongoing conflict between the US and Iran has resulted in a significant disruption to Middle East oil supplies, causing crude oil prices to fluctuate on Wednesday. Despite US President Donald Trump's reassurance that the conflict would conclude "very quickly," investors remain cautious over the progress of peace negotiations.

Oil Prices Decline

Brent crude futures declined by 45 cents, or 0.4%, to $110.83 per barrel, while U.S. West Texas Intermediate crude futures fell by 27 cents, or 0.3%, to $103.88 per barrel. However, crude oil prices on Multi Commodity Exchange (MCX) witnessed an upward movement, rising nearly 0.70% to ₹10,095 per barrel.

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Uncertainty Surrounds Conflict Timeline

President Trump's comments on Tuesday created uncertainty surrounding the conflict timeline. He stated that the US might still launch another strike on Iran, despite earlier indications that the conflict could end soon. Trump suggested that the US could carry out another strike within days if no deal was achieved, sparking concerns over a possible escalation with Iran.

Disruption in Strait of Hormuz

The ongoing US-Israeli conflict with Iran has effectively disrupted operations in the Strait of Hormuz, a critical route that typically handles around one-fifth of global oil shipments. According to the International Energy Agency, this has resulted in the world's largest oil supply disruption.

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Market Outlook

Global brokerage firm Citi predicts that Brent is likely to rise to $120 per barrel in the near-term, citing the possibility of an extended supply disruption and wider downside risks. On the technical outlook, Ponmudi R, CEO of Enrich Money, noted that immediate resistance stands at ₹10,000-₹10,050, while immediate support lies at ₹9,800-₹9,750.