MCX crude oil futures witnessed a sharp pullback on Monday, March 9, falling nearly 10% from their intraday highs after an early surge driven by escalating geopolitical tensions in the Middle East.
During early trade, crude oil futures on the Multi Commodity Exchange of India (MCX) had surged over 21–24%, touching levels close to Rs 10,500 per barrel after opening around Rs 8,499. However, prices later cooled significantly as the day progressed.
By 12:31 PM, MCX crude oil futures were trading around Rs 9,551 per barrel, still up Rs 1,188 or 14.21%, indicating a sharp pullback from the morning peak but maintaining strong gains compared with the previous close.
Profit booking after extreme spike
One of the primary reasons behind the decline from the intraday high is profit booking after an unusually sharp rally. The early surge was triggered by panic in global energy markets following disruptions linked to the US–Israel–Iran conflict, particularly concerns about supply routes through the Strait of Hormuz.
The Strait of Hormuz handles roughly 20% of global oil shipments, making any disruption there highly sensitive for global oil markets. Initial reports of supply disruptions and attacks on energy infrastructure triggered aggressive buying in crude futures.
However, after prices spiked to extreme levels, traders began locking in profits, which caused the rally to cool.
G7 discussions on strategic oil reserve release
Another key factor easing the rally was reports that G7 finance ministers are discussing a coordinated release of oil from strategic petroleum reserves to stabilize markets.
The proposed move could involve releasing oil through a coordinated mechanism led by the International Energy Agency, similar to past actions taken during major supply shocks such as the 1991 Gulf War, the 2011 Libya crisis, and the 2022 Russia–Ukraine conflict.
The possibility of such a release has reduced fears of an immediate global supply shortage, leading to some cooling in prices.
Global crude benchmarks also ease from peak levels
Global oil benchmarks also showed signs of stabilisation after the initial spike. Brent crude, which had surged toward $115–$117 per barrel, eased slightly as markets began factoring in the potential supply response from major economies.
The combination of profit booking, policy intervention expectations, and technical overbought conditions contributed to crude oil prices falling from their day highs.
Despite the pullback, crude oil remains significantly elevated compared with previous sessions, reflecting continued uncertainty around global energy supply amid the ongoing geopolitical conflict.