05-02-2026

As we are going through the various geopolitical events the international oil market remains highly volatile amid escalating geopolitical tensions, shifting trade alliances, and ongoing negotiations between major powers.

Recent news is Crude oil futures moved higher after the US shot down an Iranian drone on Strait of Hormuz, and it is a critical chokepoint as roughly 20% of the world’s supply moves   escalating geopolitical tensions in the Middle East and can cause significant price hikes and tighten global supply.

 Indian- US trade pivot newly finalized trade deal between Prime Minister Modi and President Trump, the U.S. has slashed tariffs on Indian exports (including textiles and gems) from 50% down to 18%. India has committed to phasing out "new" purchases of Russian crude.

05-02-2026

We can also see that imports from Russia is also decreasing which shows reliance on Russian oil is decreasing.India’s crude oil imports from Russia fell by roughly 0.6–0.7 million barrels per day (mb/d) , about 650,000 barrels per day.

Trump also said India could step up crude oil imports from the United States and potentially Venezuela, which would lessen its reliance on Russian oil. Indian officials, however, have not publicly confirmed any such shift in sourcing.

 To avoid immediate energy shocks, the U.S. is facilitating India’s return to the Venezuelan market that holds largest proven oil reserves approximately 303 billion barrels, which the U.S. now effectively oversees following its intervention in Caracas.Moving from Russian to Venezuelan crude is not just a political move, but a potentially lucrative one: India could cut its annual fuel import bill by $3 billion by switching to Venezuelan heavy crude.

The IEA raised its 2026 global oil demand growth forecast to 930,000 bpd and cut supply growth estimates, signalling a tighter market.

Markets are also closely watching US-Iran talks scheduled for this Friday. If a deal is reached, it could further flood the market with oil, potentially lowering prices despite the ongoing OPEC+ cuts.

05-02-2026

India’s Oil Strategy Ahead: Securing Energy Through Diversification and Diplomacy.

India, the world’s third-largest crude oil importer (over 85% import dependent), faces a critical challenge: fuelling its rapidly growing economy while navigating volatile geopolitical landscapes, price fluctuations, and the global energy transition. Its future strategy is not about achieving self-sufficiency, but about ensuring affordable, secure, and reliable supplies.

The core pillars of this strategy are aggressive diversification of sources and multi-vector energy diplomacy, now accelerated by the lessons from recent geopolitical shocks.

05-02-2026

India is actively pursuing a multi-alignment diplomatic strategy to safeguard its crude oil needs amid global geopolitical tensions and supply disruptions. Rather than relying on a single.

Officials say India continues engagement with OPEC members such as Saudi Arabia, Iraq, and the UAE to ensure long-term supply stability, while simultaneously deepening energy ties with Russia, taking advantage of discounted crude without formally breaching international sanctions.

At the same time, India has expanded crude imports from the United States, Brazil, Guyana, and West Africa, signalling its intent to diversify sources and reduce geopolitical risk. Diplomatic channels are also being used to negotiate long-term contracts, flexible pricing mechanisms, and alternate payment systems, including non-dollar settlements.

05-02-2026

EIA data showed U.S. crude stocks highlights volatile refinery demand and stable supply. Crude inventories fell by 3.8 million barrels in the week ended January 7 and by 2.3 million barrels in the week ended January 28, but these declines were offset by sizeable builds of 3.4 million barrels and 3.6 million barrels in the middle of the month.

Inventory Snapshot -

Previous: -2.3 million barrels

Estimated: -0.2 million barrels

Actual: -3.5 million barrels

Today’s EIA inventory report provides supportive signals for crude oil, but rising gasoline stocks keep prices range-bound. Traders are likely to remain cautious, awaiting clearer demand indicators or fresh geopolitical catalysts.

05-02-2026

US – Iran trade escalation

Temporary Price Dip vs. Long-term Floor: As of February 5, 2026, Brent crude futures fell 1.4% to $68.47 a barrel and WTI dropped to $64.23 on the news of the Oman talks. If a deal is reached, it may trigger a global economic relief rally, increasing industrial oil consumption. Historically, when Brent settles near the $60-$65 mark due to diplomacy, it often creates a coiled spring effect where any future minor disruption causes a disproportionate spike back toward $80 or $90.

The Risk Premium Paradox:  While the current talks removed a portion of the geopolitical risk premium (which recently kept prices elevated), a long-term de-escalation could lead to underinvestment in alternative energy or US shale, as the perceived emergency fades. If Iran’s production—which has recently normalized to pre-sanction levels—is fully integrated and then faces a sudden future snap-back of sanctions, the market would be more vulnerable. With the Middle East accounting for nearly one-third of global supply, any failure in the long-term Oman framework could see prices rapidly reclaim the $5-$10 per barrel premium that was just shed.

Demand Surges Post-Diplomacy: De-escalation often encourages China, the world`s largest importer, to ramp up stockpiling while prices are low. If China perceives a stable window of $68 Brent, a massive buying spree could tighten the physical market, pushing futures back up by 3-5% in subsequent quarters. Technical analysts currently see strong support at $61.00 - $62.55, suggesting that the downside is limited, while the upside remains sensitive to any friction in the talks involving Iran’s ballistic missiles or nuclear enrichment.

05-02-2026

Technical analysis

Commodity Research: Crude Oil (MCX)

Date: February 5, 2026 | Trend: Bullish (Buy on Dips)

Market Overview

Crude Oil has exhibited a strong bullish structure over the last fortnight. Price action is currently characterized by "higher highs" and "higher lows," indicating robust buying interest at lower levels. Despite broader global supply-side uncertainties, the short-term momentum remains firmly in favor of the bulls, supporting a Buy on Dips strategy.

Technical Outlook

The price is currently consolidating near a pivotal resistance zone. A clean breakout above the immediate resistance levels is likely to trigger a fresh leg of the rally.

Support Levels: Primary Support: 5700 (Crucial psychological and technical base)

Secondary Supports: 5450 | 5300 | 4900

Resistance Levels:  Immediate Resistance: 6000

Major Hurdles: 6200 | 6600

 Strategic Trading Calls

We recommend two potential entry strategies based on your risk appetite:

Option A: Pullback Entry (Buy on Dips)

Action: Buy Around 5700

Stop Loss: 5300 (Closing basis)

Target: 6100

Option B: Momentum Breakout (Aggressive)

Action: Buy Above 5950

Stop Loss: 5500

Target: 6200

05-02-2026

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