Tensions in the Middle East reached a boiling point, driving crude oil prices higher by more than 7% on Monday. The spike came after U.S. and Israeli forces hammered Iran, prompting Tehran to shutter the Strait of Hormuz and rattle global energy markets.
Brent futures soared to $82.37 per barrel—the loftiest since early 2025—with a 7.60% gain to $78.41. WTI crude advanced 7.19% to $71.86 per barrel, reflecting trader panic over supply chokeholds.
World leaders and oil majors are auditing reserves as Hormuz, the artery for 20% of seaborne oil, faces indefinite closure. India’s exposure is acute, with over 40% of its crude imports navigating this route.
OPEC countered with plans to boost output by 206,000 barrels per day next month under Saudi and Russian guidance. Analysts remain skeptical, citing the entrenched geopolitical risk premium.
This escalation has supercharged safe-haven buying in gold and silver, while oil’s volatility dominates headlines. India’s economy, reliant on 90% imported crude, braces for pain: pricier petrol, rampant inflation, and fiscal squeezes.
Per Brickwork’s Rajiv Sharan, RBI’s inflation fight could force a rethink on rate cuts, hitting growth prospects. Stocks are in defensive crouch, eyeing turbulence in energy, finance, and transport stocks alongside FII exits.
Metals markets eye prolonged support from the crisis. Easing hinges on Iranian leadership stability, de-escalation talks, and Hormuz reopening guarantees.
Worst-case forecasts: $90+ Brent if Hormuz stays jammed; over $100 in regional meltdown. JM Financial pegs India’s added import costs at $2 billion per dollar rise, eroding trade equilibrium.
Near-term trading will hinge on oil dynamics over profits, with sustained unrest inflating shipping, insurance, and disrupting vital Gulf passages for broader fallout.