Crude Oil Rebounds on Renewed US-Iran Tensions Despite Diplomatic Push | Commodity Markets Today

Crude oil prices bounced back on Wednesday after renewed tensions between the United States and Iran shifted the market's focus back to supply risks in the Middle East.

MCX crude oil futures for August traded higher in early deals after falling sharply in the previous session. In the international market, Brent crude moved back above the $88-a-barrel mark, while WTI crude also recovered from Tuesday's losses.

The recovery came after reports that US forces intercepted an Iranian ballistic missile, reviving concerns over the security of oil supplies from the region. The incident followed hopes of diplomatic progress earlier this week, which had triggered heavy selling across oil markets.

Geopolitical Risk Returns to the Fore

Oil prices had fallen nearly 5% in the previous session after reports suggested Washington and Tehran were exploring diplomatic channels, easing fears of an immediate disruption to crude exports.

That optimism faded after the latest military developments. While oil production has not been affected, traders remain sensitive to any escalation involving Iran because of its importance to regional energy supplies.

Markets Keep a Close Watch on the Strait of Hormuz

Attention also remains on the Strait of Hormuz, one of the world's busiest oil transit routes.

Any disruption to shipping through the narrow waterway could affect global crude flows and push freight costs higher. Although there has been no interruption so far, the latest developments have prompted traders to rebuild some of the geopolitical premium that had disappeared earlier in the week.

Fed Decision Could Drive the Next Move

Apart from geopolitical developments, investors are awaiting the US Federal Reserve's policy decision later on Wednesday.

The central bank is widely expected to leave interest rates unchanged. However, markets will closely track the Fed's commentary on inflation and economic growth for signals on the future path of monetary policy. A stronger US dollar following the meeting could limit gains in commodities, including crude oil.

Crude Oil Outlook: Key Levels to Watch

According to Kotak Neo Commodity Research, MCX Crude Oil (August) is expected to trade with a sideways-to-bullish bias in the ₹7,635-₹8,180 range.

On the technical charts, immediate support is placed at ₹7,746, followed by ₹7,639 and ₹7,289. Resistance is seen at ₹8,096, ₹8,203 and ₹8,552.

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