Crude oil prices are likely to remain volatile with an upward bias in the coming week as uncertainty over US-Iran negotiations and risks to energy shipments through the Strait of Hormuz keep geopolitical concerns in focus, analysts said.
The US midterm election results, particularly Washington’s stance towards Tehran, will be a key trigger for prices, alongside weekly crude oil stock data from the American Petroleum Institute and oil imports, they added.
“Crude oil is likely to remain volatile with an upward bias in the coming week, as geopolitical risk continues to outweigh conventional demand-side factors,” said Ajit Mishra, SVP of Research at Religare Broking.
Last week, crude oil futures for November delivery rose by ₹137, or 1.4 per cent, to close at ₹9,937 per barrel on the Multi Commodity Exchange (MCX).
“MCX crude oil futures have continued their streak of positive momentum for the fourth consecutive week, posted weekly gains of 1.4 per cent in the past week and managed to close on a positive note, driven by escalating tensions between the US and Iran and fears of supply disruptions,” Choice Broking said.
The market’s focus is on whether diplomatic signals from Washington and Tehran can translate into an agreement and ease the risk premium built into oil prices.
Iran confirmed receiving a letter from US Vice President JD Vance aimed at reviving peace negotiations, while regional mediators returned to Tehran to facilitate a possible agreement.
US President Donald Trump said negotiations with Iran are “going fine”, but added that he was “not in that much of a hurry” to make a deal. Iran’s Foreign Minister Abbas Araghchi said talks with Qatari mediators were ongoing on a plan to reopen the Strait of Hormuz within two days if the US cooperates.
The diplomatic overtures have yet to dispel risks to shipping. The continued tanker attacks and threats to shipping through the Strait of Hormuz, alongside escalating clashes involving Saudi Arabia and Houthi forces, kept supply risks elevated, Choice Broking said.
Meanwhile, the OPEC-plus alliance of oil-producing countries has agreed in principle to keep its December production targets unchanged, signalling a pause in output policy adjustments until next year as the group prepares to negotiate production quotas for 2027, according to reports.
Adding to concerns over energy infrastructure, QatarEnergy on Sunday said that one of its liquefied natural gas tankers was hit by “unidentified objects” while transiting the Arabian Gulf.
In global markets, Brent oil futures for December delivery rose nearly 1 per cent to finish the week at $117.64 per barrel after touching $118 per barrel on the Intercontinental Exchange (ICE).
West Texas Intermediate (WTI) futures for the same month gained 1 per cent to end at $104.12 per barrel.
“Brent hovering around $118 per barrel reflects a significant risk premium amid persistent US-Iran tensions and concerns over potential disruptions to shipping through the Strait of Hormuz,” Mishra said.
He noted that the US Federal Reserve’s decision last week to hold interest rates steady had done little to ease inflation concerns, with elevated energy prices complicating the global monetary outlook.
On the outlook for global prices, Mishra said Brent faces resistance at $120 per barrel, while $110-112 remains an important support zone.
Any diplomatic breakthrough could trigger sharp profit-booking, he added.
