Sensex Today | Stock Market Highlights: Sensex, Nifty end over 1% higher; bank, midcap stocks lead recovery
Justin Khoo, Senior Market Analyst – APAC, VT Markets
Crude oil markets are entering the week under a sustained geopolitical risk premium, with Brent holding near $107 per barrel and WTI trading close to $112 after gaining nearly 11% last week.
The rally is being driven by severe supply-side uncertainty, particularly around the Strait of Hormuz, where flows remain deeply constrained, reportedly operating at less than 10% of pre-conflict levels, according to estimates from the International Energy Agency.
At this stage, crude is no longer trading purely on macro fundamentals but is instead being dictated by geopolitical timelines and headline risk. The market is effectively pricing in a structural disruption scenario, with limited visibility on when stable and insurable energy flows can resume. Even partial reopening signals are unlikely to fully normalise sentiment unless there is clarity on sustained transit conditions.
The near-term outlook remains highly binary. Any credible de-escalation or confirmed resumption of tanker traffic through Hormuz could trigger a sharp downside correction in crude, alongside a relief rally in global risk assets. However, with the geopolitical deadline approaching and no clear ceasefire framework in place, the directional bias remains skewed to the upside, as any escalation particularly involving energy infrastructure could drive a significant spike in prices and intensify volatility across global markets.
In this environment, oil has effectively become the primary transmission channel for geopolitical risk, and price action is expected to remain highly reactive, with liquidity conditions tightening across asset classes as markets position for potential energy shocks reminiscent of historic supply crises.
