Crude oil futures edged lower on Thursday morning despite the United States launching precision strikes on Iranian military targets, according to market data and reports. At 10.06 am on Thursday, September Brent oil futures on ICE were at $84.70, down 0.29%, while August WTI crude oil futures on NYMEX were at $79.45, down 0.19%. On the Multi Commodity Exchange (MCX), August crude oil futures traded at ₹7,652, up 0.55% from the previous close of ₹7,610, as per the report by BL Mangaluru Bureau.
Geopolitical Developments: US Strikes on Iran
The price move came even as US Central Command announced on X that US forces struck Iranian command centres, air defence sites, missile and drone capabilities, and coastal surveillance facilities. The strikes used precision munitions against targets in multiple locations, including Bandar Abbas and coastal defence and cruise missile sites on Greater Tunb Island during a 90-minute wave. The stated objective was to "further degrade Iran’s ability to threaten innocent mariners crewing commercial vessels transiting the Strait of Hormuz."
In response, analysts Warren Patterson, Head of Commodities Strategy at ING Think, and Ewa Manthey, Commodities Strategist, noted in their Commodities Feed that "the rapid deterioration is having a meaningful impact on vessel flows from the Persian Gulf." They added that tanker traffic through the Strait of Hormuz remains depressed, with crossings still under clear pressure, according to the report.
Supply and Inventory Dynamics
Data released by the US Energy Information Administration (EIA) for the week ending July 10 showed a decline in commercial crude oil inventories. The key inventory figures are summarised in the table below:
| Product | Change (million barrels) | Comparison to 5-year average |
|---|---|---|
| Commercial crude oil | –1.7 | 6% below |
| Total motor gasoline | –1.5 | 8% below |
| Distillate fuel | +4.6 | 11% below |
US crude oil inventories stood at 409.7 million barrels, approximately 6% below the five-year average for this time of year, per EIA. Motor gasoline inventories fell by 1.5 million barrels and were 8% below the five-year average, while distillate fuel inventories rose by 4.6 million barrels and were 11% below the average.
The ING Think strategists highlighted that "the concern is that renewed oil supply disruptions come amid the large inventory drawdowns through the second quarter, leaving the market more vulnerable." They further noted that global Strategic Petroleum Reserve (SPR) releases, which have helped the market in recent months, "are set to end in the next few weeks."
Demand Side: US Product Supplied Data
On the demand front, EIA data showed total products supplied over the last four-week period averaged 20.3 million barrels per day, up 0.3% from the same period last year. Motor gasoline product supplied averaged 8.9 million bpd, down 1.1% year-on-year. Distillate fuel product supplied averaged 3.7 million bpd, down 2.1%, while jet fuel product supplied was up 2.3% compared with the same four-week period last year, according to the report.
Other Commodity Markets
Beyond crude oil, other commodity futures also moved on the MCX and NCDEX. August nickel futures on MCX traded at ₹1,635 during the initial hour, up 1.55% from the previous close of ₹1,610. On the National Commodities and Derivatives Exchange (NCDEX), August dhaniya (coriander) contracts were at ₹15,498, up 0.61%, and September pepper futures traded at ₹737, up 0.33%, as reported.
The muted response in crude oil futures despite escalating geopolitical tensions underscores the market's focus on underlying supply-demand fundamentals and the potential for further volatility as SPR releases expire and the Strait of Hormuz traffic remains constrained.
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