Brent crude futures rose $1.05, or 1.6%, to settle at $66.52 a barrel, while US West Texas Intermediate (WTI) crude climbed 87 cents, or 1.42%, to close at $62.02 a barrel. Both benchmarks have now posted gains across five straight trading sessions.
Analysts said the sustained upward momentum reflects a market that is increasingly pricing in geopolitical uncertainty, even as fundamental indicators point to ample supply.
Iran Tensions Fuel Supply Anxiety
Investor sentiment has been rattled by fears that a potential US military strike on Iran could disrupt oil shipments from the region. Iran is a key producer within the Organization of the Petroleum Exporting Countries (OPEC), and any disruption to its exports could have significant implications for global supply.
Market participants are also wary of possible Iranian retaliation targeting US interests or energy infrastructure in the region, which could further tighten supplies and push prices higher.
Venezuela Export Resumption Offers Limited Relief
On the supply side, Venezuela’s return to international oil markets following regulatory clearances provided some counterbalance to Iran-related fears. The country has begun resuming exports after easing operational constraints, adding incremental barrels to global supply.
However, traders said Venezuela’s production recovery is unlikely to offset a major disruption in Middle Eastern exports, particularly if tensions escalate rapidly.
US Inventory Build Adds to Mixed Signals
Further complicating the outlook, data showed an unexpected rise in US crude stockpiles, typically a bearish signal for prices. Rising inventories usually indicate weaker demand or excess supply, which can pressure prices.
Despite this, oil markets largely brushed aside the data, underscoring how geopolitical developments are currently outweighing traditional demand-supply indicators.
Why Oil Prices Matter for India
For India, one of the world’s largest crude importers, sustained increases in oil prices pose risks to inflation, the current account balance and fuel costs. India imports more than 80% of its crude oil requirements, making it highly sensitive to global price swings.
Outlook: Volatility Likely to Persist
Energy analysts expect oil prices to remain volatile in the near term as traders track diplomatic signals from Washington and Tehran. Any escalation could quickly send prices higher, while de-escalation or additional supply announcements may trigger pullbacks.