In a move that sent shockwaves through energy markets, crude oil benchmarks soared on Tuesday, with Brent crude climbing 2.81% to $103.03 per barrel and WTI advancing 2.80% to $95.03. The surge, marking nearly a 3% gain, stems directly from Iran’s decision to close the Strait of Hormuz in response to the intensifying war involving the US and Israel.
This strategic strait, cradling the Persian Gulf, handles about one-fifth of global oil shipments, making it indispensable for international trade. Its blockade has ignited fears of widespread supply shortages, driving prices up over 50% in the last month alone.
For oil-thirsty India, the implications are dire. The nation, which sources much of its energy needs via this route from Iran, has been in frantic negotiations. A breakthrough came when Iran permitted two LPG-laden Indian ships—Shivalik and Nanda Devi—to proceed. Shivalik has already berthed at Mundra Port in Gujarat, and Nanda Devi is set to dock at Kandla Port today, easing immediate LPG supply pressures.
Adding to the optimism, the UAE-bound Indian tanker Jag Ladki, carrying more than 80,000 tons of crude, is steaming towards India and should arrive by week’s end. These developments offer temporary respite, but experts highlight Asia’s precarious position due to overreliance on Gulf crude.
The closure underscores the fragility of global energy infrastructure. As diplomatic channels strain under the weight of conflict, markets remain on edge. Inflationary pressures from higher oil costs could ripple through economies, hitting everything from transportation to household budgets. Stakeholders are urging restraint to avert a full-blown crisis.