US-Iran war: Oil prices rebounded after fresh US military strikes in Iran cast doubt over the prospects of an interim agreement between Tehran and Washington to reopen the Strait of Hormuz, even as negotiations are expected to continue for a few more days.
The global crude benchmark Brent crude climbed above $98 per barrel after plunging more than 7% on Monday, while West Texas Intermediate hovered near $92 per barrel.
Back home, crude oil prices also witnessed a similar upward movement on Tuesday. MCX crude oil prices rose as much as 1.90% to ₹8,779 per barrel.
What's driving the rally in crude oil prices?
US forces targeted missile-launch locations and boats allegedly attempting to deploy mines, according to US Central Command, following reports from Iranian media about explosions near the strait.
Negotiations are expected to continue for “a few more days” as both parties work on the wording of an initial agreement, Secretary of State Marco Rubio was quoted as saying by Bloomberg on Tuesday.
Crude oil prices had already fallen sharply at the start of the week after President Donald Trump said the discussions were “going well,” while also warning of further military action if the talks failed.
The US and Iran have been discussing an arrangement to extend the ceasefire by roughly two months, under which Washington would ease its blockade, and Tehran would reopen the Strait of Hormuz. However, disagreements persist, with Tehran insisting on retaining control over maritime traffic through the strategic passage, a position opposed by the US, Arab nations, and Europe.
In a separate post, Trump stated that Iran’s enriched uranium should ideally be destroyed within the country itself, though he added that the material could alternatively be handed over to the US.
According to Bloomberg, Washington has pointed to the Islamic Republic’s nuclear programme as a key justification for entering the conflict alongside Israel, arguing that Tehran’s pursuit of nuclear weapons poses a serious threat.
Crude oil price outlook
On the technical outlook, Ponmudi R, CEO of Enrich Money, said that MCX Crude Oil opened with a gap up and is trading within the ₹8,700– ₹8,750 zone, near the lower end of the ascending trend-line structure that continues to provide structural support, though MACD and broader technical indicators reflect a persisting bearish bias.
“Immediate resistance stands at ₹8,800– ₹8,870; a sustained move above this zone could trigger a recovery toward ₹8,950– ₹9,000. On the downside, ₹8,650– ₹8,570 acts as immediate support; a break below this area could extend the decline toward ₹8,500– ₹8,450. The near-term bias remains cautious, driven by ongoing geopolitical developments,” Ponmudi said.
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