Crude oil prices steady amid renewed US-Iran fears; Brent likely to rise $120/bbl, says Citi

US-Iran war: Oil prices slipped on Wednesday after US President Donald Trump reiterated that the conflict with Iran would conclude “very quickly.” However, investors remained cautious over the progress of peace negotiations as the ongoing conflict continues to disrupt Middle East oil supplies.

Brent crude futures declined 45 cents, or 0.4%, to $110.83 per barrel, while U.S. West Texas Intermediate crude futures fell 27 cents, or 0.3%, to $103.88 per barrel.

However, crude oil prices on Multi Commodity Exchange (MCX) witnessed an upward movement. MCX crude oil prices rose nearly 0.70% to ₹10,095 per barrel.

What's weighing on crude oil prices?

Despite telling US lawmakers late Tuesday that the conflict could end soon, President Donald Trump earlier indicated that the United States might still launch another strike on Iran. He said he had come within an hour of authorising an attack before ultimately delaying the decision.

When asked about the timeline for a possible action, Trump said he could wait “two or three days, maybe Friday, Saturday, Sunday — or perhaps early next week,” suggesting only a short window for developments.

His remarks about the possibility of renewed military action came just a day after he stated that he had paused plans to resume hostilities following a fresh proposal from Tehran aimed at ending the US-Israeli conflict.

Speaking again on Tuesday, Trump claimed Iranian leaders were eager to reach an agreement and cautioned that the US could carry out another strike within days if no deal was achieved.

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, quoted as saying by Reuters, this has resulted in the world’s largest oil supply disruption.

Trump’s latest comments renewed concerns over a possible escalation with Iran, which has so far resisted US demands to abandon the remaining parts of its nuclear programme after weeks of strikes that began in late February.

However, Trump has repeatedly threatened renewed military action only to later pull back since a ceasefire agreement was reached on April 8, making traders cautious about increasing bullish bets without clearer signs that the conflict will intensify again.

According to a Bloomberg report, NATO is considering escorting vessels through the strait if the passage remains shut beyond early July also put pressure on futures, with the situation still unresolved.

Crude oil price outlook

Global brokerage firm Citi said that Brent is likely to rise $120 per barrel in the near-term, noting that the oil market is underestimating the possibility of an extended supply disruption and wider downside risks, as per a Reuters report.

On the technical outlook, Ponmudi R, CEO of Enrich Money, said that immediate resistance stands at ₹10,000– ₹10,050; a sustained move above this zone could trigger a recovery toward ₹10,150– ₹10,300.

“On the downside, ₹9,800– ₹9,750 acts as immediate support; a break below this area could extend the decline toward ₹9,700– ₹9,600. The near-term bias remains cautious, largely driven by ongoing supply disruption concerns in the Strait of Hormuz,” Ponmudi said.

(With inputs from agencies)

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