Escalating tensions with Iran and persistent supply disruptions are driving crude oil prices higher, impacting global energy markets and raising concerns about future supply.
Key Points
- Crude oil prices are surging due to heightened geopolitical tensions after Donald Trump's warning of military action against Iran.
- The closure of the Strait of Hormuz for six weeks has disrupted global energy flows, tightening crude oil, natural gas, and refined product supplies.
- Despite OPEC+ plans to increase output, concerns remain about supply reaching markets due to damaged infrastructure and ongoing conflict.
- Declining floating inventories and tightening storage could drive a sharp increase in oil prices if the Hormuz situation persists.
- Analysts predict Brent crude prices could rise towards $130 per barrel in the coming weeks due to physical tightness in Southeast Asian markets.
Crude oil prices gained Rs 91 to Rs 9,284 per barrel, hovering near its record levels, in futures trade on Monday after US President Donald Trump warned of military strikes on Iran's power plants and other infrastructure if the Strait of Hormuz is not reopened.
On the Multi Commodity Exchange, crude oil for May delivery increased by Rs 91, or 1 per cent, to Rs 9,284 per barrel. Oil prices hit record of Rs 9,407 per barrel on March 23, 2026.
Impact on Oil Prices, Markets, and Global Economy
The uptick in crude oil prices came as geopolitical tensions intensified after President Trump increased pressure on Tehran while the Strait of Hormuz remained closed for the sixth consecutive week, disrupting global energy flows, Kaveri More, Commodity Analyst at Choice Broking, said.
This has impacted shipments of crude oil, natural gas and refined products, tightening supply conditions and supporting prices, she added.
In the international markets, trends were mixed. West Texas Intermediate (WTI) crude futures for the May contract fell 0.48 per cent to $111 per barrel, while Brent oil for June delivery rose 1.3 per cent to $110.43 per barrel.
Strait of Hormuz Crisis: Why It Matters for Global Oil Supply
More said that although OPEC+ has announced plans to increase output by 2,06,000 barrels per day in May, concerns persist over how additional supply would reach markets amid damaged infrastructure and ongoing conflict.
She added that OPEC production fell sharply in March due to forced export cuts, while US crude output also declined earlier this year following severe winter storms, further adding to global supply constraints.
Iran’s Response and Rising Middle East Tensions
Dhaval Popat, Energy Analyst at Choice Institutional Equities said as the physical tightness in Southeast Asian markets is gradually shifting westward, which could push Brent crude prices towards $130 per barrel in the coming weeks.
"If the Hormuz situation remains status quo without progress in US-Israel-Iran negotiations, declining floating inventories and tightening marginal storage could drive a sharp increase in oil prices, leading to sustained higher prices during the month of April," he added.
