Monday, March 2 — Crude oil futures on the Multi Commodity Exchange (MCX) surged sharply in early trade, hitting the 6% upper circuit amid rising geopolitical tensions and fears of supply disruption.
As of 09:09 AM, MCX Crude Oil Futures (continuous contract) were trading at Rs 6,457 per barrel, up Rs 365 or 5.99%, effectively touching the exchange-imposed upper limit for the session.
What triggered the spike?
The sharp rally follows intensifying conflict in the Middle East after major U.S.–Israel strikes on Iran and subsequent retaliatory developments. Markets are now closely monitoring risks surrounding the Strait of Hormuz, a key global oil transit chokepoint.
The strait handles approximately 15–16 million barrels per day of crude and petroleum products, accounting for a significant share of global oil trade. Even concerns about vessel rerouting, higher freight costs, or partial disruption can trigger sharp price reactions.
Why the move is significant
A 6% upper circuit move indicates strong buying pressure and limited sellers at current levels. Such sharp intraday gains reflect heightened volatility and immediate repricing of geopolitical risk.
Analysts warn that sustained disruption in shipping routes could:
- Push global crude benchmarks higher
- Increase freight and insurance costs
- Add to inflationary pressures globally
Energy-importing economies may face higher input costs if elevated crude levels persist.
Markets are expected to remain sensitive to further geopolitical headlines, shipping data and any confirmation regarding flows through the Strait of Hormuz.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Commodity market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.