US-Iran war: Oil prices continue to rise; Brent crude above $111 as Trump's deadline looms

Elevated crude oil prices directly impact the cost of raw materials and fuel for the auto sector, potentially leading to higher input costs and reduced consumer demand due to increased running costs for vehicles. This comes after a period of volatility for auto stocks, with recent crashes and surges.

Maintain a bearish bias on auto stocks, particularly those with high exposure to internal combustion engine vehicles, looking for shorting opportunities on rallies, with strict stop-losses.

For Indian markets, this story mainly matters for IOC, ONGC, RELIANCE and the Oil & Gas, Automobiles, Aviation pocket. The current signal is bearish, so traders should look for follow-through in price, volume, and sector breadth instead of reacting to the headline alone.

Watch whether the next market session confirms the setup described here: Higher crude prices increase input costs for OMCs, potentially impacting refining margins and working capital requirements, despite potential for higher retail prices. As an upstream oil producer, ONGC benefits from higher crude oil prices, leading to increased realizations and profitability. Also track volume confirmation, sector participation, and whether the move holds beyond the first reaction.

• •Brent crude prices touched $111 per barrel on Tuesday, April 7.
• •WTI crude prices rose to $115 per barrel.
• •Analysts expect oil prices to remain elevated due to the US-Iran conflict.
• •Repercussions are expected for energy chains.
• •Risk flag: Any de-escalation in US-Iran tensions could lead to a sharp correction in oil prices.