Surge in Crude Oil Prices Exceeds 7% Amid Escalating Israel-Iran Conflict

New Delhi, March 2: crude oil prices surged over 7% on Monday following an escalation of conflict in West Asia. This spike occurred after military strikes by the United States and Israel against Iran.

Brent crude futures rose to $82.37 per barrel, marking the highest level since January 2025. The price of Brent crude increased by 7.60%, reaching $78.41 per barrel, while U.S. West Texas Intermediate (WTI) crude futures climbed 7.19% to $71.86 per barrel.

Reports indicate that Iran has halted shipping through the vital Strait of Hormuz, prompting governments and oil refiners worldwide to assess their reserves.

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) has agreed to increase oil production starting next month. Major members, led by Saudi Arabia and Russia, will boost output by an additional 206,000 barrels per day.

Analysts suggest that the attacks by the U.S. and Israel represent a significant geopolitical shock, raising global oil risk premiums and increasing demand for safe-haven investments like gold and silver.

Rajeev Sharma, head of criteria, model development, and research at Brickwork Ratings, stated, “India imports nearly 90% of its crude oil. Continuous increases in Brent crude prices will make fuel more expensive, raise inflation, and widen the current account deficit. This could impact the Reserve Bank of India’s inflation control policies and delay interest rate cuts.”

The Indian stock market has already entered a risk-averse phase. Increased volatility, foreign investor withdrawals, and pressure on sectors such as automotive, finance, and energy are anticipated.

As long as tensions remain high, precious metals are likely to receive support.

Sharma noted that any reduction in the additional price linked to the conflict would only occur with clarity in Tehran’s leadership, concrete efforts to de-escalate tensions, and assurance that critical oil routes like the Strait of Hormuz remain open.

Reports suggest that if disruptions in the Strait of Hormuz continue, Brent crude prices could exceed $90 per barrel. In the event of a broader regional conflict, prices could surpass $100 per barrel.

JM Financial Institutional Securities reported that every $1 increase in crude oil prices adds approximately $2 billion to India’s annual import bill, exerting pressure on the trade balance.

About 20% of the world’s oil is transported through the Strait of Hormuz, and over 40% of India’s crude oil imports come via this route. In the near future, market trends may depend more on oil prices than on corporate earnings.

Prolonged tensions could lead to increased transportation and marine insurance costs, disrupt maritime routes in the Gulf region, and exert additional pressure on the trade balance.

– DBP/

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Kuldeep Singh Chundawat: My name is Kuldeep Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.