Oil stocks in focus as crude hits 5-month high after U.S. strikes Iranian nuclear sites

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Shares of oil and gas companies are expected to be in focus on Monday after crude oil prices surged to their highest levels since January, following U.S. airstrikes on key Iranian nuclear facilities. Brent crude futures rose $1.88, or 2.44%, to $78.89 a barrel as of 11:22 GMT, while U.S. West Texas Intermediate (WTI) crude gained $1.87, or 2.53%, to $75.71.Earlier in the session, both benchmarks jumped over 3%, with Brent touching $81.40 and WTI reaching $78.40—both five-month highs—before paring some gains.The sharp rise came after U.S. President Donald Trump announced that the U.S. had 'obliterated' Iran's main nuclear sites over the weekend in coordination with Israeli forces. The escalation has raised fears of further instability in the Middle East, with Iran vowing to retaliate.Iran, a key OPEC member, is the bloc's third-largest crude producer. The latest developments have sparked concerns that Tehran could move to block the Strait of Hormuz—a critical waterway that handles nearly 20% of global crude shipments.Iran's Press TV reported that its parliament has approved a measure to close the strait. While Iran has made similar threats in the past, it has never followed through.Since the conflict began on June 13, Brent has surged 13%, while WTI is up around 10%.Analysts, however, cautioned that the current geopolitical risk premium may not sustain unless there is a tangible disruption in global oil supply.: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)

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Indian benchmarks drop 1% as investors fret over heightened Mideast tensions

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Business Standard

44 minutes ago

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Oil surges to five-month high after US hits Iran's key nuclear sites

Market participants expect further price gains amid mounting fears that an Iranian retaliation may include a closure of the Strait of Hormuz Reuters NEW DELHI Oil prices jumped on Monday to their highest since January as the United States' weekend move to join Israel in attacking Iran's nuclear facilities stoked supply concerns. Brent crude futures were up $1.52 or 1.97 per cent to $78.53 a barrel as of 0503 GMT. US West Texas Intermediate crude advanced $1.51 or 2.04 per cent to $75.35. Both contracts jumped by more than 3 per cent earlier in the session to $81.40 and $78.40, respectively, touching five-month highs before giving up some gains. The rise in prices came after US President Donald Trump said he had "obliterated" Iran's main nuclear sites in strikes over the weekend, joining an Israeli assault in an escalation of conflict in the Middle East as Tehran vowed to defend itself. Iran is Opec's third-largest crude producer. Market participants expect further price gains amid mounting fears that an Iranian retaliation may include a closure of the Strait of Hormuz, through which roughly a fifth of global crude supply flows. "The current geopolitical escalation provides the fundamental catalyst for (Brent) prices to traverse higher and potentially spiral towards $100, with $120 per barrel appearing increasingly plausible," said Sugandha Sachdeva, founder of New Delhi-based research firm SS WealthStreet. Iran's Press TV reported that the Iranian parliament had approved a measure to close the strait. Iran has in the past threatened to close the strait but has never followed through. Iran and Israel exchanged air and missile strikes on Monday, as global tensions rose over Tehran's expected response to a U.S. attack on its nuclear facilities. "The risks of damage to oil infrastructure ... have multiplied," said Sparta Commodities senior analyst June Goh. Although there are alternative pipeline routes out of the region, there will still be crude volume that cannot be fully exported out if the Strait of Hormuz becomes inaccessible. Shippers will increasingly stay out of the region, she added. Goldman Sachs said in a Sunday report that Brent could briefly peak at $110 per barrel if oil flows through the critical waterway were halved for a month, and remain down by 10 per cent for the following 11 months. The bank still assumed no significant disruption to oil and natural gas supply, adding global incentives to try and prevent a sustained and very large disruption. Brent has risen 13 per cent since the conflict began on June 13, while WTI has gained around 10 per cent. Given the Strait of Hormuz is indispensable for Iran's own oil exports, which are a vital source of its national revenues, a sustained closure would inflict severe economic damage on Iran itself, making it a double-edged sword, Sachdeva added. Meanwhile, Japan on Monday called for de-escalation of the conflict in Iran, while a South Korean vice industry minister voiced concern over the potential impact of the strikes on the country's trade. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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Sensex crashes 900 points; why is Indian stock market falling after the US attack on Iran? Explained with key factors

Indian stock market witnessed significant losses in early trade on Monday, June 23, with the Sensex crashing over 900 points, and the Nifty 50 falling below 24,850 on a broad selloff amid weak global cues. The Sensex opened at 81,704.07 against its previous close of 82,408.17 and touched an intraday low of 81,476.76, falling over 900 points, or more than 1 per cent. The Nifty 50 opened at 24,939.75 against its previous close of 25,112.40 and dropped over 1 per cent to an intraday low of 24,824.85. The BSE Midcap and Smallcap indices also fell by almost a per cent each. The overall market capitalisation of BSE-listed firms dropped to nearly ₹ 445 lakh crore from about ₹ 448 lakh crore in the previous session, making investors poorer by about ₹ 3 lakh crore within the first 15 minutes of the session. Here are the five key factors that could be behind the market selloff: Fresh escalations in tensions between Israel and Iran have dealt a blow to market sentiment, shattering the belief that the war between Israel and Iran may not linger for a longer period. The US on Saturday struck Iran with a surprise assault on three of Iran's nuclear facilities, which added a new turn to the evolving situation in the Middle East. Experts highlight that the Iranian response to the US attack will hold the key to how the Israel-Iran episode shapes up. "Even though the US bombing of Iran's three nuclear facilities has worsened the crisis in West Asia, the impact on the market is likely to be limited. The uncertain factor now is the timing and nature of the Iranian response. If Iran targets and damages the US defence facilities in the region or seriously hurts US military personnel, the US response can be huge, and this might further worsen the crisis," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited. According to media reports, Iran's Supreme National Security Council is exploring the possibility of closing the Strait of Hormuz, an important global energy route. According to Bloomberg, roughly one-fifth of global oil supplies pass through this route daily. A closure of the Hormuz Strait would significantly disrupt crude oil supplies, shoot up oil prices, and severely damage the economies of major oil importers like India. Experts believe that crude oil prices above $80 per barrel for an extended period will negatively impact India's fiscal math, distorting its trade deficit. Elevated crude oil prices can also raise inflation, weaken the rupee, increase companies' input costs, and dent their profitability. Brent crude jumped over 2 per cent to trade near $79 a barrel on Monday morning due to heightened concerns of global supply disruption after the US on Saturday attacked three nuclear facilities in Iran. Meanwhile, the Indian rupee declined 17 paise to 86.72 against the US dollar in early trade on Monday. The dollar index jumped nearly half a per cent, weighing on stock market sentiment. A stronger dollar increases the risk of foreign capital outflows, especially at a time when geopolitical tensions make riskier equities less appealing and investors flock to safe-haven assets. Even though the Indian economy is driven largely by domestic consumption, concerns are mounting that it cannot remain completely immune to global developments, and the country's growth dynamics could take a hit as a result. Jaspreet Singh Arora, Chief Investment Officer at Equentis Wealth Advisory Services, pointed out that geopolitical tensions increasingly appear to be the new normal. "It began with the Russia-Ukraine conflict, over two years ago, followed by the Israel-Hamas war. In between, there were flare-ups between India and Pakistan, and now tensions are escalating between Israel and Iran,' said Arora. Besides, tariff-related uncertainties persist. While several major economies have been engaged in negotiations with the US administration since President Donald Trump announced reciprocal tariffs on US trading partners, significant uncertainty remains about how these negotiations will ultimately unfold. Read all market-related news here Read more stories by Nishant Kumar