Crude oil futures traded higher on Tuesday morning following an increase in tensions in the West Asia region.

At 9.57 am on Tuesday, May Brent oil futures were at $71.30, up by 0.32 per cent, and May crude oil futures on WTI (West Texas Intermediate) were at $67.58, up by 0.31 per cent. March crude oil futures were trading at ₹5878 on Multi Commodity Exchange (MCX) during the initial hour of trading on Tuesday against the previous close of ₹5865, up by 0.22 per cent, and April futures were trading at ₹5885 against the previous close of ₹5875, up by 0.17 per cent.

The recent attacks on the Houthis by the US have escalated tensions in the market. Following this, the Houthis retaliated by targeting a US aircraft carrier. Meanwhile, the US President Donald Trump has said that Iran will be held responsible, and suffer the consequences, if the Houthis continue attacks in the Red Sea.

A post by Trump on the social media platform Truth Social said: “Let nobody be fooled! The hundreds of attacks being made by Houthi, the sinister mobsters and thugs based in Yemen, who are hated by the Yemeni people, all emanate from, and are created by, IRAN. Any further attack or retaliation by the ‘Houthis’ will be met with great force, and there is no guarantee that that force will stop there. Iran has played ‘the innocent victim’ of rogue terrorists from which they’ve lost control, but they haven’t lost control. They’re dictating every move, giving them the weapons, supplying them with money and highly sophisticated Military equipment, and even, so-called, ‘Intelligence’. Every shot fired by the Houthis will be looked upon, from this point forward, as being a shot fired from the weapons and leadership of IRAN, and IRAN will be held responsible, and suffer the consequences, and those consequences will be dire!”

In their Commodities Feed for Tuesday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said the Trump administration is taking a more hawkish stance against Iran, having tightened oil sanctions since taking office.

Market players are now keenly watching the outcome of the proposed talks between Trump and the Russian President Valdimir Putin later on Tuesday to end the war in Ukraine.

Another post by Trump on Truth Social said: “Tomorrow morning I will be speaking to President Putin concerning the War in Ukraine. Many elements of a Final Agreement have been agreed to, but much remains. Thousands of young soldiers, and others, are being killed. Each week brings 2,500 soldier deaths, from both sides, and it must end NOW. I look very much forward to the call with President Putin.”

ING Think’s Commodities Feed said that energy markets will be watching closely for any progress — particularly whether a potential peace deal might include the resumption of some Russian energy flows. This would be more impactful for natural gas rather than oil, given that the scope to increase natural gas flows is much bigger relative to oil.

The Commodities Feed said that European natural gas prices came under pressure yesterday, falling almost 2.5 per cent on the day, amid hopes of a Russia-Ukraine peace deal. Also, the weather forecast in North West Europe is for milder temperatures over the next week. However, EU gas storage continues to tick lower. It’s now a little under 35 per cent full, down from 60 per cent at the same stage last year and below the five-year average of 46 per cent, it said.

March natural gas futures were trading at ₹350.10 on MCX during the initial hour of trading on Tuesday against the previous close of ₹351.40, down by 0.37 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), April turmeric (farmer polished) contracts were trading at ₹12540 in the initial hour of trading on Tuesday against the previous close of ₹12406, up by 1.08 per cent.

April kapas futures were trading at ₹1451 on NCDEX in the initial hour of trading on Tuesday against the previous close of ₹1455, down by 0.27 per cent.