Crude oil futures traded higher on Tuesday morning as geopolitical tensions increased concerns over tighter global supplies.
At 9.58 am on Tuesday, August Brent oil futures were at $64.85, up by 0.34 per cent, and July crude oil futures on WTI (West Texas Intermediate) were at $62.80, up by 0.45 per cent. June crude oil futures were trading at ₹5,377 on Multi Commodity Exchange (MCX) during the initial hour of trading on Tuesday against the previous close of ₹5,375, up by 0.04 per cent, and July futures were trading at ₹5,316 against the previous close of ₹5,314, up by 0.04 per cent.
According to media reports, Iran could reject a proposal by the US on the nuclear deal. A Reuters report, which quoted a diplomat who is close to the Iran’s negotiating team with the US, said: “Iran is drafting a negative response to the US proposal, which could be interpreted as a rejection of the US offer.”
Till now, five rounds of discussions were held between Iranian Foreign Minister Abbas Araqchi and the US President Donald Trump’s Middle East envoy Steve Witkoff. Reports said that Iran has rejected a US demand to scrap Iran’s uranium enrichment plans.
Market was expecting that a nuclear deal between the US and Iran could help lift sanctions on Iran. This could have helped improve crude oil supplies to the global market.
On Monday, Russia and Ukraine held their second round of peace talks. However, the talks did not yield significant results.
On Sunday, Ukraine’s drone attacks on Russian airbases damaged more than 40 aircraft. Earlier on Sunday, Ukraine came under one of the longest barrages from Russian missiles and drones. Reports said that at least 12 people were killed in a strike on a military training centre in Ukraine.
Escalation of tensions between Russia and Ukraine has increased concerns over crude oil supplies. Russia is one of the major producers of crude oil in the world market.
In their Commodities Feed for Tuesday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said the oil market surged higher on Monday, with ICE Brent hitting $65.76 a barrel at one stage, as US dollar weakness, rising geopolitical risks and possibly a supply hike from OPEC+ that fell short of expectations all provided a boost. The strength continued into early morning trading on Tuesday.
They said ongoing wildfires in Canada’s Alberta are offering further support to the market in the short run. Roughly 350,000 barrels a day of oil production is being shut down, which is around 7 per cent of total Canadian oil production.
June natural gas futures were trading at ₹318.70 on MCX during the initial hour of trading on Tuesday against the previous close of ₹314.70, up by 1.27 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), June jeera contracts were trading at ₹20,255 in the initial hour of trading on Tuesday against the previous close of ₹20,405, down by 0.74 per cent.
June guargum futures were trading at ₹9,591 on NCDEX in the initial hour of trading on Tuesday against the previous close of ₹9,536, up by 0.58 per cent.
Published on June 3, 2025