Brent crude has crossed $90 per barrel due to US-Iran tensions, raising concerns about a potential hike in petrol and diesel prices in India.
The impact of rising military tensions between the United States and Iran is now clearly visible in the global oil market. On Monday, crude oil prices saw a sharp increase, crossing the $90 per barrel mark.
This unexpected surge has raised concerns for major oil-importing countries like India. It is feared that if this trend continues, petrol and diesel prices in the country may increase.
On Monday, the international market witnessed a tremendous surge in Brent crude prices.
Brent crude rose by $2.69, or about 4%, to reach $90.79 per barrel. This is the highest level since June 11.
Last week also saw a significant 15.9% rise in Brent, the largest weekly gain since April.
Meanwhile, US West Texas Intermediate (WTI) crude was also trading higher by $2.19, or 2.65%, at $84.68 per barrel. This is also its highest level since June 12.
This surge in crude oil has once again raised concerns about petrol and diesel prices in India.
However, oil marketing companies have provided relief to consumers for now by not making any changes to the prices. Fuel prices in the country have remained stable since May 25.
Petrol and diesel prices in various cities are as follows:
The main reason for this price surge is the growing geopolitical tension between the US and Iran.
According to a Bloomberg report, the Iranian navy stopped four ships attempting to pass through the unsafe route of Hormuz.
Despite warnings, two ships were damaged after accidents while moving forward, while the other two returned. The Strait of Hormuz is a critical route for oil supply, and any disruption here affects the global market.
Furthermore, in the past week, the conflict between the two countries has extended from military bases to bridges, power facilities, and ports.
Kuwait Petroleum Corp. also reported that one of its oil facilities was heavily damaged in an Iranian attack on Saturday.
According to JPMorgan Chase & Co., global crude oil reserves, excluding China, are at a record low.
In such a scenario, if there is a major disruption in supply from the Strait of Hormuz, the market will have very few options to cope, which could lead to a further spike in prices.
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