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Informist, Thursday, Aug. 13, 2026

MUMBAI – The recent volatility in commodity markets is likely to stay for a longer period and hedgers should react to the fundamentals rather than headlines, according to a panel of experts speaking at the Global Commodity Conclave 2026 Thursday. Crude oil hedgers should monitor genuine disruptions or sanctions.

"...the geopolitical flux that we find ourselves in, first and foremost, it's here to stay," Vandana Hari, founder and chief executive officer of Vanda Insights, said. "As the world moves from a unique polar order, where the US was pretty much the single power to a multi-polar order, nobody knows what the multi-polar world is going to look like," she said, adding that "energy weaponsation" is also going to be a part of this.

Domestic hedgers also face the challenge as crude oil derivatives on the Multi Commodity Exchange of India are based on the West Texas Inermediate crude oil of the New York Mercantile Exchange, Naveen Mathur, director of commodities, currency, and international business at Anand Rathi Share and Stock Brokers Ltd, said. "The international part of players, the people who have the biggest futures, have the strategy built on the international markets. They have a proper tool on hedging for a safe international market space. Now, for the domestic players, they have not evolved to a large extent at all now to hedge their exposures on the international market," Mathur said.

"...hedging is not something to make money. It's an evident of protection tool. So when you look at the performance of a hedging, you should go back to the time when you took that decision with a clear objective and have you met that objective," Ashutosh Deshpande, senior vice president and head-commodity risk at Essar Oil (UK) Ltd., said. "So that's very crucial kind of an assessment when you do...I would say as a hedging desk, you should react to the exposures, not to the emotions from the news," Deshpande said. Hedging is for earnings before interest, tax, depreciation, and amortisation protection, he said. 

He added crude oil contracts on MCX have done well but volumes are much higher overseas, adding there is a "humongous" potential for trading volumes to grow on the domestic bourse in the coming years.

Crude oil prices, which surged past $115 per barrel in late April, are still not as the market expected when the war begun, Alay Patel, senior consultant, oil and gas at the International Energy Agency, said. He said China reducing its crude oil imports was the biggest buffer for oil prices. China may be relying on its strategic reserves or there could be a structural change in Chinese sentiment. "It's lower import demand, which helped stabilise the (oil price) crisis," he said.  End

US$1 = INR 95.42

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Ashutosh Pati

Edited by Akul Nishant Akhoury

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