Crude oil futures traded lower on Tuesday morning following reports that two US-flagged vessels have transited through the Strait of Hormuz.
At 9.59 am on Tuesday, July Brent oil futures were at $112.98, down by 1.28 per cent, and June crude oil futures on WTI (West Texas Intermediate) were at $104.12, down by 2.16 per cent. May crude oil futures were trading at ₹9950 on Multi Commodity Exchange (MCX) during the initial hour of trading on Tuesday against the previous close of ₹10057, down by 1.06 per cent, and June futures were trading at ₹9587 against the previous close of ₹9687, down by 1.03 per cent.
In a post on X, US Central Command said: “US Navy guided-missile destroyers are currently operating in the Arabian Gulf after transiting the Strait of Hormuz in support of Project Freedom. American forces are actively assisting efforts to restore transit for commercial shipping. As a first step, 2 US-flagged merchant vessels have successfully transited through the Strait of Hormuz and are safely headed on their journey.”
U.S. Navy guided-missile destroyers are currently operating in the Arabian Gulf after transiting the Strait of Hormuz in support of Project Freedom. American forces are actively assisting efforts to restore transit for commercial shipping. As a first step, 2 U.S.-flagged merchant…
— U.S. Central Command (@CENTCOM)
In their Commodities Feed for Tuesday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said markets may find some relief on Tuesday following US President Donald Trump’s overnight comments suggesting the conflict could continue for another two to three weeks. However, markets are likely to view this with considerable scepticism, given the recent escalation and the repeated extensions of projected timelines for ending hostilities since the conflict began.
“We are seeing the first signs of the ceasefire between the US and Iran breaking down amid a re-escalation in the Persian Gulf. ICE Brent rallied 5.8 per cent on Monday to settle above $114 a barrel,” they said.
The US struck a number of Iranian boats. There are claims that Iran struck a US warship, which the US has denied. In addition, Iran has resumed attacks on infrastructure in neighbouring countries, with the UAE intercepting several Iranian missiles, while Fujairah port was hit by a drone. This port is important for UAE oil exports. It is situated outside the Strait of Hormuz, which allowed oil exports to continue (and, in fact, to increase) despite the war and blockade of the Strait, they said.
Prior to the ceasefire, Fujairah was targeted several times. Even so, oil loadings continued largely unaffected, with only temporary halts. LSEG data shows that crude oil exports from Fujairah totalled nearly 1.7 million barrels a day in April.
They said that this re-escalation comes at a time when the US has started guiding commercial vessels through the Strait of Hormuz, under ‘Project Freedom’. Two US-flagged commercial vessels have passed through the Strait of Hormuz under the plan, according to the US. Clearly, continuation of ‘Project Freedom’ risks further escalation. Any relief from stranded vessels making their way through the Strait will be temporary, with very few inbound vessels moving into the Persian Gulf, they added.
May natural gas futures were trading at ₹272.40 on MCX during the initial hour of trading on Tuesday against the previous close of ₹274.50, down by 0.77 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), May turmeric (farmer polished) contracts were trading at ₹16098 in the initial hour of trading on Tuesday against the previous close of ₹15988, up by 0.69 per cent.
May jeera futures were trading at ₹19925 on NCDEX in the initial hour of trading on Tuesday against the previous close of ₹20025, down by 0.50 per cent.
–EOM–