futures traded higher on Monday morning as the and attacked each other’s ships over the weekend.
At 10.02 am on Monday, November Brent oil futures were at $97.14, up by 0.89 per cent, and October crude oil futures on WTI (West Texas Intermediate) were at $92.37, up by 0.97 per cent. September crude oil futures were trading at ₹8712 on Multi Commodity Exchange (MCX) during the initial hour of trading on Monday against the previous close of ₹8578, up by 1.56 per cent, and October futures were trading at ₹8445 against the previous close of ₹8328, up by 1.40 per cent.
A statement by the US Central Command (CENTCOM) said its forces struck three Iranian crude oil carriers on September 5 after the Islamic Revolutionary Guard Corps (IRGC) launched ballistic missiles toward two US Navy warships patrolling regional waters.
Following Iran’s failed attacks, CENTCOM permanently disabled the IRGC crude oil carriers m.t. Downy off the coast of Kharg Island and m.t. Stark 1 near Jask. American forces also completely destroyed the unladen crude oil carrier m.t. Kylo (also known as the ‘Noxen’) in the Gulf of Oman, striking the vessel in multiple critical locations to render it inoperable after the crew was directed to abandon ship, the statement said.
The three Iranian crude oil tankers are part of a multibillion-dollar shadow network that funds the IRGC and its regional proxies, it said.
Quoting Adm Brad Cooper, CENTCOM commander, the statement said: “Let the message to the IRGC be clear: If you shoot at two of our ships, we will impose an even higher economic cost —taking out three of yours. We will not hesitate to defend American forces, and if necessary, destroy Iran’s limited and exposed oil fleet.”
In their Commodities Feed for Friday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said the oil market remains well-supported with little sign of a peace between the US and Iran. The US struck several Iranian-linked tankers in response to Iran targeting US warships. Iran says it has also taken action against tankers navigating unauthorised routes, and now plans to enforce a new restricted zone outside the Strait of Hormuz — a move that could put additional vessels in the Gulf of Oman at risk.
Despite the escalation, oil continues to flow. The US energy secretary said oil moving through the Strait of Hormuz is averaging a little more than 9 million barrels a day, made possible by US Navy escorts.
They said that OPEC+ kept its output quotas unchanged for October, which comes as no surprise. The group announced increases this year, which fully unwind voluntary cuts of 1.65 million barrels a day. However, given ongoing disruptions in the Persian Gulf, most members will produce well below their quota.
September natural gas futures were trading at ₹278.10 on MCX during the initial hour of trading on Monday against the previous close of ₹280.50, down by 0.86 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), October turmeric (farmer polished) contracts were trading at ₹20566 in the initial hour of trading on Monday against the previous close of ₹20402, up by 0.80 per cent.
September cottonseed oilcake futures were trading at ₹2860 on NCDEX in the initial hour of trading on Monday against the previous close of ₹2842, up by 0.63 per cent.