Crude oil prices jump over 7% as Israel–Iran war tensions shake global markets
New Delhi: Global crude oil prices spiked more than 7 per cent on Monday as the Israel–Iran war intensified following US and Israeli military strikes on Iran, heightening fears of supply disruptions in the energy market.
Brent crude briefly climbed to $82.37 — its highest level since January 2025 — before trading 7.60 per cent higher at $78.41 per barrel. Meanwhile, US West Texas Intermediate (WTI) crude futures advanced 7.19 per cent to $71.86.
Concerns escalated further after reports that Iran shut navigation through the strategically vital Strait of Hormuz, a key artery for global oil shipments. Governments and refiners are said to be reviewing stockpiles amid uncertainty over supply continuity.
At the same time, OPEC has decided to proceed with a planned production increase next month despite the conflict. Major producers led by Saudi Arabia and Russia are expected to add 206,000 barrels per day.
Market analysts describe the US–Israel strikes as a major geopolitical shock that has pushed up the global oil risk premium while strengthening demand for safe-haven assets such as gold and silver.
“For India, with close to 90 per cent dependence on imported crude, any sustained rise in Brent prices quickly feeds into higher fuel costs, broader inflation, and a wider current account deficit. This complicates the RBI’s disinflation path and could delay rate cuts,” said Rajeev Sharan, Head – Criteria, Model Development and Research, Brickwork Ratings.
Indian equity markets have already shifted into risk-off mode, with expectations of heightened volatility, potential foreign investor outflows, and pressure on sectors such as automobiles, financials and other energy-intensive industries.
Precious metals are expected to remain supported as long as geopolitical tensions persist. According to Sharan, the conflict-driven premium in oil prices will ease only once there is clarity on leadership in Tehran, credible diplomatic de-escalation channels, and assurance that critical oil transit routes such as the Strait of Hormuz remain operational.
Some market projections suggest Brent crude could rise above $90 per barrel if disruptions in the Strait intensify, and potentially cross $100 in the event of a broader regional conflict.
In a separate note, JM Financial Institutional Securities said that every $1 increase in crude prices raises India’s annual import bill by roughly $2 billion, adding strain to the trade balance.
Nearly 20 per cent of global oil supplies pass through the Strait of Hormuz, with more than 40 per cent of India’s crude imports routed through the channel. Analysts warn that market sentiment may shift from earnings-driven to oil-driven trading in the near term.
Extended hostilities could also push up logistics and marine insurance costs, disrupt shipping across Gulf routes, and further widen trade imbalances.
IANS