Tensions in the Middle East have supercharged oil prices, with a massive US and Israel-led assault on Iran prompting a 2% rally in Brent crude to $72.48 per barrel. The campaign’s focus on crippling Iran’s naval forces threatens the Strait of Hormuz, a linchpin for over one-fifth of global crude exports connecting the Persian Gulf to open seas.
Intensified missile warfare risks transforming this passage into a battleground, potentially choking off vital oil flows from the region. Geopolitical hawks point to synchronized attacks and Tehran’s fierce responses as catalysts for soaring ‘war premiums.’
Financial heavyweights like Barclays project Brent at $80 if supply lines falter significantly—though they caution against assuming total shutdowns. The mere threat has already embedded a hefty risk factor into current quotes.
India, guzzling 85% imported oil, faces amplified vulnerabilities: steeper bills, hotter inflation, sluggish growth. Countermeasures shine through, however. Years of diversification have shifted imports away from volatile Gulf paths toward stable US and African streams.
Refiners boast multi-week inventories, with flexible routing keeping crude flowing. Underground arsenals at Padur (2.25 MMT capacity), Visakhapatnam (1.33 MMT), and Mangaluru (1.5 MMT) provide emergency muscle. Chandikhol’s emerging coastal reserve adds to the arsenal, enabling crisis releases to buoy state firms when global benchmarks soar.
As the world digests this flare-up, oil’s role as a geopolitical barometer underscores enduring fragilities in energy security. India’s preparations exemplify prudent foresight amid brewing storms.