Crude Oil Prices Trade Higher on Geopolitical Concerns and Supply Disruption Fears

Crude oil prices traded higher on Friday morning amid reports of escalating tensions in West Asia and potential disruptions to oil supplies. The market reaction followed reports that the US was considering plans to attack Iran after the US mid-term elections.

At 10:01 am on Friday, December Brent oil futures were recorded at $113.73, marking an increase of 0.49 per cent. Meanwhile, December crude oil futures on West Texas Intermediate (WTI) stood at $100.17, up by 0.70 per cent. On the Multi Commodity Exchange (MCX), November crude oil futures traded at ₹9,522 during the initial hour of trading, compared to the previous close of ₹9,484, reflecting a 0.40 per cent increase. December futures on the MCX traded at ₹9,378 against the previous close of ₹9,344, up by 0.36 per cent.

According to Warren Patterson, Head of Commodities Strategy at ING Think, and Ewa Manthey, Commodities Strategist, oil prices surged on Thursday, with front-month ICE Brent settling 4 per cent higher at just above $113 a barrel. Analysts noted that the rally was driven less by current fundamentals and more by mounting supply concerns, particularly regarding a potential renewed escalation in the Persian Gulf that could threaten oil flows.

Reports indicate that the US is reinforcing its military presence in the region with the deployment of a second aircraft carrier, and US troops have been evacuated from certain bases in West Asia. Analysts stated that these developments call into question previous expectations that the US mid-term elections would bring de-escalation and normalization in oil flows and prices, leading them to view their earlier fourth-quarter 2026 ICE Brent average forecast of $80 a barrel as unattainable. Even without further escalation, the possibility alone is expected to keep a sizeable geopolitical risk premium embedded in prices.

In a related development, US President Donald Trump attributed rising oil prices to Iran in a post on Truth Social, criticizing the Iranian government and asserting that oil continues to move through the Hormuz Strait.

In other commodity trading on the MCX, November natural gas futures traded at ₹298.80 during the initial hour of trading on Friday, down by 2.03 per cent from the previous close of ₹305. On the National Commodities and Derivatives Exchange (NCDEX), December turmeric farmer-polished contracts traded at ₹26,760, up 0.62 per cent from the previous close of ₹26,596, while December dhaniya futures traded at ₹17,276, down 0.25 per cent from the previous close of ₹17,320.

"Geopolitical tensions in key supply regions continue to exert immediate pressure on global commodity markets, particularly crude oil. For businesses and startups dependent on energy and logistics, heightened price volatility introduces unpredictable operational costs. Companies must factor these macroeconomic risk premiums into their financial planning and supply chain strategies to effectively navigate near-term market fluctuations." — Dr. Shishir Gupta, Founder & CEO, StartupLanes