New Delhi, March 3: Amid escalating conflicts in West Asia and concerns over supply through the Strait of Hormuz, crude oil prices have shown signs of stability after a significant surge of over 10% in the previous session. On Tuesday, prices increased by nearly 1%.
U.S. crude oil futures rose by 1.4%, reaching $72.23 per barrel. Meanwhile, Brent crude traded at $79.20 per barrel, up by 1.87% in early trading.
The risk of disruptions to oil and gas supplies due to Iranian retaliatory attacks has heightened, leading to rising oil prices and growing inflation concerns. Reports indicate that Tehran has targeted Saudi Arabia’s oil and gas infrastructure and issued warnings regarding shipping in the strategic Strait of Hormuz.
Analysts suggest that the anxiety triggered by the U.S. administration’s announcement of measures to control domestic energy prices eased somewhat on Monday. U.S. Secretary of State Marco Rubio stated that Treasury Secretary Scott Basent and Energy Secretary Chris Wright will unveil a plan to address rising energy costs on Tuesday.
However, the threat to shipping in the Strait of Hormuz, a key route for global oil supply, continues to support prices. Market experts indicate that if this route is temporarily closed, India may manage the situation for a while.
Yet, if the strait remains closed for an extended period, India will need to diversify its supply sources. Reports suggest that India is already seeking alternative suppliers from Russia, Africa, and South America.
Investment bank Morgan Stanley warned that if full-scale conflict erupts in West Asia and oil supply through the Strait of Hormuz is disrupted for a prolonged period, Brent crude prices could soar to $120 per barrel.
Another recent report indicated that in the event of disruptions in the strait, Brent crude could exceed $90 per barrel, and in the case of widespread regional conflict, it could surpass $100 per barrel.
Estimates suggest that in the case of limited conflict, oil prices could rise by $5 to $10 per barrel, while direct damage to Iran’s oil infrastructure could lead to an increase of $10 to $12 per barrel.
The report noted that every $1 increase in crude oil prices raises India’s annual import bill by approximately $2 billion, putting pressure on the trade balance.
About 20% of the world’s oil transport passes through the Strait of Hormuz, with over 40% of India’s crude oil imports coming from this route.
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My name is Ganpat Singh Choughan. I am an experienced content writer with 7 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.
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