Domestic crude oil prices surged over 4% on the MCX on Tuesday, hitting an intraday high of Rs 9,106 per barrel as the situation around the Iran-Israel-US conflict remains fluid. Now in its third week, the crisis has lifted global prices above the $102 per barrel mark, with concerns mounting that crude could spike to $150 in the coming weeks if de-escalation efforts fail and the Strait of Hormuz remains shut.

Brent prices have appreciated by over 35% this year so far.

The Strait of Hormuz, a 21-mile-wide waterway, remains a critical passage for global supply. It accounts for 20% of the world’s oil and liquefied natural gas flows.

Commenting on the fundamental trends, Ajit Mishra, Senior Vice President – Research at Religare Broking, said that the near-term outlook is dominated by extreme volatility due to the ongoing US/Israel-Iran conflict, as oil markets are highly sensitive to potential supply disruptions in the Strait of Hormuz.

“Crude oil prices have started appreciating ever since the Iran conflict escalated with the US and Israel. The upside momentum has eased of late as the IEA began releasing 400 million barrels of emergency oil reserves to stabilise supply amid ongoing regional conflicts. Having said that, unless oil tanker movements gather pace from the Hormuz region, the overall outlook shall remain positive for the oil market,” Mishra said.

Technical outlook

“Crude oil was seen trading in a narrow price band for months, and it was only during the first week of this month that it breached resistance barriers comfortably in line with the emergence of the US/Israel conflict with Iran. Crude oil had appreciated to 10,549 on MCX after closing above the strong resistance zone of 6,800-7,000,” the Religare analyst said.

MCX futures prices on the weekly chart remain above the key Exponential Moving Averages (EMA), signalling positive momentum ahead, Mishra said.

Crude oil trading strategy

Consider initiating long positions in the 8,600-8,800 zone, with a stop loss below 8,150 and a target of 9,900.

Also Read: Gold plunges Rs 3,000/10 gram as investors turn cautious ahead of Fed policy. Should you sell on rise?

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)

Vedanta’s second-quarter results met street expectations on robust operational performance, with analysts viewing the miner as well-positioned to benefit from the commodity rebound while advancing its deleveraging strategy.

Brokerages Nuvama, Citi, ICICI Securities and Investec maintained a strong bullish stance on metals and natural resources major Vedanta Ltd.

They cited factors such as Vedanta Resources’ leverage being at comfortable levels, potential medium-term upside in aluminium on the London Metal Exchange (LME), volume growth, likely lower costs, and the likely completion of the demerger process as reasons for the bullish call.

Nuvama said Vedanta’s focus on demerger and delivery is on the verge of paying off, supported by tailwinds from commodity prices. The brokerage expects this to contribute to higher third-quarter earnings.

“Q3 FY26 EBITDA is likely to jump 20 per cent QoQ led by higher prices, volume, and lower aluminium cost of production,” Nuvama said.

It increased Vedanta’s FY27 estimated EBITDA by 4 per cent to Rs 63,450 crore, factoring in higher commodity prices.Citi Research saw potential medium-term upside for aluminium on the LME as a positive factor.”Our commodities team expects aluminium to average USD 3,500 in 2027. Aluminium has bullish fundamental exposure to structural energy-transition and AI trends and is leveraged to a cyclical growth rebound and US debasement concerns. During 2026, dovish Fed prospects, related lower US real interest rates, and a pickup in the US and global growth expectations are likely to be supportive,” it said.

In its analysis, Citi factored in higher prices for zinc, aluminium, and silver in FY27, which will boost Vedanta’s earnings.

“We incorporate FY27 zinc/aluminium/silver at USD 2,850/ USD 2,800/ USD 40 vs USD 2,700/ USD 2,600/ USD 38 earlier. We raise FY26/FY27/28 EBITDA by 6 per cent, 15 per cent and 16 per cent, largely on higher aluminium and zinc LME and power EBITDA (commissioning of new assets),” it said.

ICICI Securities said Vedanta is a prime beneficiary of the commodity cycle, with the company’s aluminium division continuing to deliver strong earnings amid higher LME prices.

“Aluminium division is expected to drive the majority of earnings, aided by better volumes, lower costs, and potentially better LME (aluminium demand-supply likely to be favourable). Power segment and zinc shall play a supporting role,” the brokerage said.

Stating that Vedanta is a pure commodity play, ICICI Securities noted that the mining major will likely be the biggest beneficiary of a rally in commodity prices.

“Aluminium, zinc, and silver contribute over 80 per cent of EBITDA, and the company has good growth plans for these segments, enabling the growth story to remain intact. Additionally, the aluminium segment would see backward integration into bauxite-alumina-coal, which would make Vedanta one of the lowest cost producers,” it said.

UK-based Investec Bank PLC said that the management execution on debt refinancing at Vedanta Resources – the company’s parent firm – is noteworthy, implying a tapering yield ask into FY27 or FY28.

Investec also noted that Vedanta’s dividends in 1HFY26 stood at Rs 23 per share, with the brokerage estimating an incremental dividend of Rs 20 a share in H2 FY26.

Vedanta’s profit after tax before exceptional items jumped 13 per cent year-on-year to Rs 5,026 crore. The company clocked second quarter EBITDA of Rs 11,612 crore, reflecting 12 per cent YoY growth with EBITDA margin expanded by 69 bps YoY to 34 per cent.

India’s markets regulator aims to boost institutional participation in the country’s agriculture and non-agriculture commodity markets to make them more attractive for hedging, Chairman Tuhin Kanta Pandey said on Thursday.

“We are looking to enhance institutional participation to make this market more attractive for hedging,” Pandey said during a speech at the Bloomberg Forum for Investment Management.

The Securities and Exchange Board of India has been looking to strengthen the country’s commodities markets and had said it will engage with the government on permitting banks, and pension funds to trade commodities.

“Deepening our cash equities market and improving the derivatives market is a high priority for us,” Pandey said during the event, according to a statement from SEBI.

The regulator had said in August it was also considering extending equity derivatives contract tenures and limiting who can trade.

It is looking to improve the quality of the derivatives market by extending the tenure and maturity of such contracts, whole-time member Ananth Narayan said in July. The regulator is also exploring bond derivatives to make the corporate bond market more accessible, Pandey said.

Sebi will “engage” with the government to allow banks, insurance companies and pension funds to invest in non-agriculture commodity derivative markets, its chairman Tuhin Kanta Pandey said on Wednesday.

He said the capital markets regulator is also looking at a proposal to allow foreign portfolio investors to trade in non-cash settled, non-agricultural commodity derivative contracts.

“We will also engage with the government to consider banks, insurance companies and pension funds to trade in these (non-cash, non-agricultural) markets,” Pandey said, while speaking at the event organised by MCX.

By December-end, Sebi will include commodity-specific brokers in a common reporting mechanism for compliance reports, Pandey pointed out.

Stating that commodity derivative markets play a very important role for the economy, Pandey said India aspires to be the “price-setter” instead of being a “price taker” at the global level.

There is a need to look at how to broaden the acceptance of Indian benchmarks at home and abroad, he said, stressing that in volatile times like the current one, the exchanges can act as a good tool of price insurance and help protect profit margins.The career bureaucrat-turned-securities regulator specifically pointed out that the recent doubling of tariffs on aluminium and copper imports by the US “directly affects” India’s export landscape.”In such a volatile environment, a robust derivatives market provides a powerful shield, allowing Indian producers and consumers to hedge against global price shocks,” Pandey said.

He said the market becomes very essential in the case of critical minerals like lithium, cobalt, nickel and rare earth elements, which are building blocks of green energy and posed a challenge.

“What can our markets do as India pursues its goal of self-reliance in critical minerals? Can we develop financial instruments that help finance and de-risk the exploration and mining of these vital resources?”

Affirming that Sebi will continue to strengthen the integrity and safety of commodity markets, Pandey underlined that real-time margin collection and continuous monitoring are “non-negotiables” for the regulator.

Strengthening India’s commodity markets is “high” on Sebi’s regulatory agenda, he said, listing out some measures in this regard.

It has already constituted a committee to recommend measures for deepening the agriculture commodity segment, Pandey said, adding that the watchdog will also constitute a working group for developing the non-agricultural commodity space, including metals.

The regulator’s comments led to buying on the MCX’s counter, and the price per share closed 3.51 per cent up at Rs 7,919.45 apiece on the BSE against a 0.38 per cent gain on the benchmark.

A recent development highlights the ongoing interagency drama between the US Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC): the classification of major cryptocurrencies has become a focal point of contention. 

Once again, the CFTC has affirmed its position that Ethereum (ETH) and several other cryptocurrencies should be classified as commodities, intensifying the battle for regulatory oversight in the expansive digital assets industry.

Regulatory Rift With SEC Over Bitcoin, Ethereum, And Litecoin Classification

The latest episode in this regulatory feud unfolded with the CFTC filing a complaint against the crypto exchange KuCoin, coinciding with the unsealing of an indictment by the US Department of Justice (DOJ) against KuCoin and its founders, Chun Gan and Ke Tang. 

The CFTC’s complaint alleged that KuCoin engaged in illegal off-exchange commodity futures transactions and leveraged, margined, or financed retail commodity transactions. 

Furthermore, the exchange was accused of operating without the necessary registrations, failing to supervise its activities diligently, and neglecting to implement an effective customer identification program.

However, the most striking aspect of the complaint lies in the CFTC’s assertion that KuCoin facilitated trading involving digital assets such as Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC), recognizing them as commodities. 

This starkly contrasts with the SEC’s current stance, championed by Chair Gary Gensler, which suggests that only Bitcoin holds the commodity classification, leaving other cryptocurrencies outside this designation, including Ethereum.

This ongoing turf war over cryptocurrency classification has a history, as evidenced by the CFTC’s previous lawsuit against Binance last year, where Ethereum and Litecoin were also deemed commodities. 

Legal Experts Suggest Turf War Over Crypto Jurisdiction

The discrepancies between the two regulatory bodies have sparked debate within the industry, with legal experts such as Jake Chervinsky, Chief Legal Officer at venture capital firm Variant, interpreting the CFTC’s position as a challenge to the SEC’s authority. 

Chervinsky suggests that the CFTC’s message to the SEC is that numerous digital assets should be regarded as commodities, indicating that the cryptocurrency space is within the jurisdiction of both agencies, even if the CFTC’s approach is less vocal. Chervinsky’s statement further reads:

Usually, the SEC and CFTC pretend they aren’t in a turf war over crypto. Today the CFTC is openly attacking the SEC’s supposed investigation of ETH. This may seem minor, but is actually pretty savage interagency drama by DC standards… I read it as CFTC saying to SEC ~ a ton of other digital assets are commodities too and you’re not the only one who gets to judge them; this space belongs to us just as much as you, even if we aren’t as loud about it.

As the CFTC and SEC clash intensifies, the industry awaits further developments and official rulings that will shape the regulatory landscape for cryptocurrencies and their respective classifications.

At the time of writing, the price of ETH stands at $3,543, experiencing a slight 0.6% decline in the past 24 hours. This follows a notable 5% rebound over the past seven days.

Featured image from Shutterstock, chart from TradingView.com 

A rise in geopolitical tensions across the world could have an adverse impact on commodity markets and on access to credit, particularly in a higher interest rate environment, Federal Reserve Governor Lisa Cook said on Wednesday.

“We’ve experienced these geopolitical tensions that you’re talking about, and certainly any shock could make the situation worse that we’re already (in)… and could be destabilizing to commodity markets, could be destabilizing to the system of credit,” Cook said during a panel discussion at a conference hosted by the Central Bank of Ireland in Dublin.

“We are watching and waiting. We’re being vigilant and that’s what we do. We identify, assess and monitor these vulnerabilities that I mentioned.”

Cook’s comments followed a speech in which she outlined in more detail a number of international risks, including tensions in Russia and the Middle East, as well as persistent inflationary pressures abroad and a further economic slowdown in China, that she said could threaten global financial stability.

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