US-Iran war: Oil prices surged on Monday after US and Israeli strikes on Iran, along with Tehran’s retaliatory attacks on Israel and US military bases across the Gulf, disrupted the global energy supply chain.
West Texas Intermediate was trading at $72.79 per barrel early Monday, marking an 8.6% jump from around $67 on Friday. Meanwhile, Brent crude, the global benchmark, was trading at $79.41 per barrel early Monday, marking a 9% jump from Friday’s price of $72.87, which had already touched a seven-month high at the time.
Back home, Multi-Commodity Exchange of India (MCX) crude oil prices surged more than 10% amid escalating tensions in the Middle East. The MCX crude oil contract for March expiry climbed ₹624, or 10.24%, to trade at ₹6,716 per barrel.
How US-Iran war impact oil prices?
Oil prices swung sharply amid rising tensions in the Middle East, with WTI and Brent crude briefly surging past $75 per barrel and $82 per barrel, respectively — their highest levels since June and January 2025.
The rally was triggered by Iran’s retaliatory strikes across the region in response to continuing U.S. and Israeli military actions, fuelling fears of potential disruptions to global oil supplies. Volatility intensified further after reports emerged of the death of Iranian Supreme Leader Ali Khamenei.
Another key driving factor was news of attacks on at least three vessels near the Strait of Hormuz, a critical shipping route that handles nearly 20% of global oil and gas trade.
Iran is said to have warned ships against passing through the Strait, prompting several shipowners and traders to temporarily halt transit, disrupting tanker movement through the corridor.
Crude oil prices outlook
According to Kaynat Chainwala, AVP, Commodity Research, Kotak Securities, a sustained rally in oil prices would likely require a prolonged disruption of flows through the Strait of Hormuz, potentially lasting four to five weeks, in line with the timeframe referenced by Trump regarding military operations.
“Although OPEC+ plans to raise output by 206,000 barrels per day starting in April to mitigate supply risks, increased production would not fully compensate for a closure or severe restriction at a chokepoint that facilitates roughly one-fifth of global energy trade. If tanker traffic normalises, recent price spikes may fade; however, continued constraints could trigger a far more pronounced supply shock,” Chainwala said.
Meanwhile, brokerage firm JM Financial expects severe dislocation of oil supplies and global supply chains, with a spike in Brent crude prices to USD90-100/bbl, in the short term.
Can rising crude oil prices trigger fuel prices in India?
For India, which meets nearly 85% of its crude oil demand through imports, a prolonged rise in crude prices poses both macroeconomic and sectoral risks. OMCs remain especially exposed, as higher crude costs can squeeze refining margins, raise operational and working capital needs, and result in increased borrowing expenses and higher debt burdens.
Sumit Pokharna, VP-Fundamental Research, Kotak Securities, believes that higher crude oil prices are negative for refining companies like Oil Marketing Companies (OMCs) as it impacts their margins, operating costs, working capital, interest costs, and increases debt.
“If the situation persists, then a retail fuel price increase is also possible, but it may not be immediate,” Pokharna said.
On the other hand, JM Financial further explained that if the Middle East tensions persist, elevated oil prices would directly transmit into higher input costs and financial markets, and macro stability could deteriorate.
“For *every $1/bbl increase in Brent, we estimate an impact of ~ ₹0.52/litre on diesel and ~ ₹0.55/litre on petrol retail prices*,” the firm said.
It also noted that the government is not expected to cut excise duties to absorb part of the burden faced by OMCs, at this stage.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
