New Delhi | Crude oil prices rose nearly 2 per cent to Rs 9,821 in futures trade on Monday, tracking firm global benchmarks as traders weighed supply risks tied to US-Iran tensions and their impact on global supply.

On the Multi Commodity Exchange, crude oil for May delivery increased by Rs 156, or 1.61 per cent, to Rs 9,821 per barrel in a business turnover of 16,361 lots.

Crude oil prices hovered around Rs 9,800 per barrel on Monday, as traders assess developments in US-Iran tensions and potential supply stability, though prices remain elevated overall, Gaurav Garg, Research Analyst at Lemonn Markets Desk, said.

In the international market, Brent oil for the July contract gained 1.53 per cent to USD 109.82 per barrel, while West Texas Intermediate (WTI) rose 1 per cent to USD 102.89 a barrel in New York.

"WTI and Brent crude edged higher on Monday towards USD 105 and 111 per barrel as markets balanced tentative diplomatic progress against ongoing operational tensions in the Strait of Hormuz," Kaynat Chainwala, AVP Commodity Research, Kotak Securities, said.

Both benchmarks remained below last week's four-year highs with the pullback reflecting cautious optimism around Iran's revised 14-point proposal and remarks from US President Donald Trump indicating talks are progressing, albeit with key disagreements unresolved, she added.

Tehran is pushing for sanctions relief, the US withdrawal and security guarantees head of any nuclear commitments, while Washington continues to insist on a nuclear-first framework.

At the same time, "Project Freedom" -- a US Central Command-led initiative involving naval escorts and expanded deployment -- has added to tensions with Iran warning of ceasefire violations.

Analysts said reports of a tanker-related incident highlight that the Strait of Hormuz remains a critical risk zone for global oil flows.

Despite OPEC+ announcing a June output increase of 1.88 lakh barrels per day, logistical constraints through the Strait are likely to limit its near-term impact, making the move largely symbolic.

"Oil is likely to remain volatile as a credible diplomatic breakthrough could trigger a sharp downside correction, while further escalation may quickly drive prices back higher. Until clearer signals emerge, elevated and reactive price action looks set to continue," Chainwala said.