Israel-Iran conflict: Over the weekend, the United States joined the Israel-Iran conflict after launching an airstrike over three key nuclear sites of Iran, calling for a ‘peace or tragedy’ surrender of the Islamic Republic.
This move from the US has spooked commodity market investors and other nations, as Iran has a strategic advantage of creating any potential disruption at one of the world’s most important oil trading routes.
Iran is the third-largest oil-producing nation among the Organisation of the Petroleum Exporting Countries (OPEC). It also holds key control over disrupting the oil trade through the Strait of Hormuz.
The Strait of Hormuz is a strategically important global trade passage for crude oil imports and exports out of Gulf nations. The passage connects the Gulf of Oman, the Arabian Sea, and the Persian Gulf. This route handles nearly 20 per cent of the world’s oil supply transits.
Effect on oil prices
US involvement in the conflict has driven up oil prices, with the WTI futures hitting nearly $77.13 per barrel (bbl) intraday on Monday, 23 June 2025. After hitting its intraday high, the West Texas Intermediate (WTI) futures are now trading 0.20 per cent lower at $73.64 per bbl, compared with the previous close at $73.84 per bbl, according to data collected from Investing.com.
The North Sea Brent futures also hit an intraday high of nearly $77.66 and are currently trading at $75.30 per bbl, compared to $75.48 per bbl at the earlier market close.
In India, the MCX Crude Oil futures July contract hit its highest levels of ₹6,550 per bbl on Monday, 23 June 2025. The commodity futures are currently trading 0.69% higher at ₹6,448 per bbl, compared with ₹6,404 per bbl, according to the data collected from the Multi Commodity Exchange (MCX).
“The situation escalated notably after the US joined Israel in striking Iranian nuclear facilities, leading to fears of supply disruptions, particularly concerning the strategic Strait of Hormuz. These increases reflect market anxieties over potential supply interruptions due to escalating military actions in the Middle East,” said Nirpendra Yadav, Senior Commodity Research Analyst at Bonanza.
Sharp jump in oil prices? Check key levels
Jigar Trivedi, Senior Research Analyst at Reliance Securities, highlighted that the MCX crude oil futures have a ‘bullish bias’ due to the technical momentum and the ongoing geopolitical risk.
The expert highlighted that the MCX Crude Oil July contract has a key support level of ₹6,100 per barrel (bbl), while the resistance level is at ₹6,600 per bbl.
“Especially involving Iran’s shipping routes or oil exports, could push prices past ₹6,600/bbl while any cooling in tensions might see a consolidation near ₹6,100/bbl. MCX Crude July has a bullish bias, thanks to technical momentum and ongoing geopolitical risk,” said the commodity market expert.
Bonanza analyst, Nirpendra Yadav, also highlighted that the long-term impact on oil prices will depend on the trajectory of the Israel-Iran conflict, especially on how Iran plans to implement its threats on the closure of one of the most important trade routes, the Strait of Hormuz.
“Global markets remain on edge, closely monitoring developments that could further influence oil prices and economic stability,” Yadav told Mint.
Global oil outlook
Trivedi also highlighted that global oil prices earlier dropped to near $73 per bbl after Iran indicated a potential de-escalation with Israel.
However, after the recent US involvement in the Israel-Iran conflict, the expert emphasised that the risk of a sharp jump in crude oil prices still exists in case there is any disruption to the Strait of Hormuz. This is likely to send the US-based WTI to the $80 to $85 per bbl mark.
The effect can also be short-lived in case a fresh de-escalation play comes into action from both Iran and Israel, along with the United States.
“This week, volatility remains high around $75/bbl, driven by headlines from the Iran‑Israel conflict, with eyes on the Strait of Hormuz for any oil supply disruptions,” said Jigar Trivedi.
On the technical front, Bonanza’s Nirpendra Yadav said that the global crude oil prices will have immediate support at the $67 level, with immediate resistance at the $81 level, with an expectation of a bullish trend in the upcoming weeks.
“Prices are still trading below the 200-weekly SMA and struggling to sustain above the 100 weekly SMA. If prices are unable to cross the 200-SMA zone, then it may resume a downtrendagain,” said Yadav.
Read all stories by Anubhav Mukherjee
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
