Crude Oil Jumps 8.4% as Brent Tops $108 on US-Iran Conflict, Petrol Holds at ₹102.12 in Delhi 

Mumbai, Sept 12: Global crude oil prices witnessed a dramatic surge during the week of 6 to 11 September 2026, with Brent crude breaching the psychologically significant $100 per barrel mark for the first time since mid-May, as escalating military hostilities between the United States and Iran triggered supply disruption fears across the Middle East. The international benchmark ended the week with a gain of approximately 8.4%, while the US West Texas Intermediate (WTI) recorded an even sharper weekly rise of 9.2%. Domestic fuel prices, however, remained remarkably stable throughout the week, with state-owned oil marketing companies absorbing the shock rather than passing on the increased cost to consumers. 

The Indian crude oil basket, which reflects the mix of crude grades imported by domestic refineries, crossed the $106 per barrel threshold on 7 September, marking a rise of nearly 29.5% from its July low. By 9 September, the basket had surged further to $108.91 per barrel, with the September average rising to $102.11 per barrel against the August average of $90.19 per barrel. The surge in international prices placed significant pressure on India’s import bill, given that the country imports more than 88% of its crude oil requirement. 

Brent Peaks at $108, WTI Crosses $104 as Conflict Escalates 

The week began with Brent crude trading near $97.73 per barrel on Monday, 7 September, as markets assessed the implications of renewed military confrontations in West Asia. The US Central Command confirmed that American forces had destroyed five Iranian crude carriers, while Iran retaliated by targeting a US base in Jordan and attacking vessels in the Strait of Hormuz and the Bab-el-Mandeb. By Wednesday, 9 September, Brent crude futures had surged 2.8% to settle at $100.66 per barrel, after touching an intraday high of $100.95, marking the first breach of the triple-digit mark since 24 July. 

Also Read: How to invest in crude oil 

The momentum continued through Thursday, 10 September, when both benchmarks rose more than 6%, with Brent surging $5.39 or 5.33% to $106.60 per barrel by midday trading, while WTI gained $5.16 or 5.37% to $101.21 per barrel. Brent crude peaked at approximately $108 per barrel during Thursday’s session, the highest level since April, as attacks by Iran-backed Houthi rebels on Saudi energy facilities set oil installations ablaze, threatening a significant expansion of the conflict. WTI also surpassed $104 per barrel for the first time in months. 

By Friday, 11 September, profit-taking and a moderation in risk sentiment led to a sharp retreat, with Brent falling 3.58% to $103.78 per barrel and WTI declining 2.17% to $99.23 per barrel. Despite the late-week correction, Brent futures remained on course for a weekly gain of 8.4% and were set to close above the critical $100 mark for the first time since mid-May. WTI’s week-to-date gain stood at 9.2%, with the benchmark having risen for eight consecutive sessions before Friday’s pullback. 

Indian Basket at $108.91 Adds $13-14 Billion to Import Bill 

The Indian crude oil basket, which comprises Brent Dated crude and the average of Oman and Dubai crude, emerged as a key indicator of the price pressures facing the domestic economy. The basket had averaged $82.04 per barrel in July, its lowest level in the current financial year, before rising to $90.19 per barrel in August. By 7 September, the basket had surged to $106.26 per barrel, and by 9 September, it reached $108.91 per barrel, according to official data. 

The sharp increase in the import basket carries significant macroeconomic implications. A $10 per barrel increase in crude oil prices adds approximately $13-14 billion to India’s import bill, placing pressure on the current account deficit and the rupee-dollar exchange rate. The free-on-board price of Brent was around $106 per barrel on 8 September, while Oman and Dubai crude were trading at approximately $105 per barrel. The elevated prices of refined petroleum products added to the strain, with high-speed diesel cracks at around $51 per barrel and aviation turbine fuel cracks at about $45 per barrel. 

Petrol at ₹102.12, Diesel ₹95.20 in Delhi as OMCs Absorb Shock 

Despite the surge in international crude prices, retail fuel prices across India remained largely unchanged throughout the week, as state-owned oil marketing companies (OMCs) opted to absorb the cost rather than pass it on to consumers. On Monday, 7 September, petrol in Delhi was priced at ₹102.12 per litre and diesel at ₹95.20 per litre, while Mumbai recorded petrol at ₹111.21 per litre and diesel at ₹97.83 per litre. These rates remained constant through Wednesday and Friday, with only marginal variations of ₹0.02 to ₹0.35 observed in select cities such as Gurgaon, Noida, and Chennai. 

The national average petrol price stood at ₹111.21 per litre, while diesel was priced at ₹97.83 per litre during the week. In Kolkata, petrol was sold at ₹113.51 per litre and diesel at ₹99.82 per litre, while Chennai recorded petrol at ₹107.77 per litre and diesel at ₹99.55 per litre. Hyderabad remained among the most expensive metros for fuel, with petrol at ₹115.69 per litre and diesel at ₹103.82 per litre. Bengaluru recorded petrol at ₹110.89 per litre and diesel at ₹98.80 per litre. 

The stability in retail prices stood in stark contrast to the volatility in international markets and reflected the pricing mechanism adopted by OMCs. Factors such as the rupee-dollar exchange rate, refining costs, taxes, and dealer margins are considered alongside international crude prices when setting fuel prices. As a result, movements in global crude prices do not necessarily translate into immediate changes in petrol and diesel prices across India. 

OMCs Lose ₹5 on Petrol, ₹23 on Diesel per Litre as Margins Turn Negative 

The reluctance to raise retail prices came at a significant cost to the financial health of oil marketing companies. According to analysts, state-owned fuel retailers were losing approximately ₹5 per litre on petrol and ₹23 per litre on diesel as the surge in international oil prices outpaced adjustments in domestic retail rates. The marketing margins on auto fuels turned negative during the week, while under-recoveries on domestic liquefied petroleum gas (LPG) stood at approximately ₹200 per cylinder. 

The negative margins reflected the lag between international crude price movements and domestic retail price adjustments. Petrol prices had been raised by ₹7.35 per litre and diesel by ₹7.53 per litre in four instalments earlier in the year, but these increases had been insufficient to offset the recent surge in crude costs. The situation was exacerbated by the weak Indian rupee against the US dollar, which added to the import cost for OMCs. 

Rupee Weakness, Choke Points Threaten Global Crude Flows 

The geopolitical situation that drove crude prices higher during the week centred on escalating military actions involving the US, Iran, and regional proxies. The shipping choke points of the Strait of Hormuz and the Bab-el-Mandeb came under renewed threat, with the capture of the port city of Mokha in Yemen by Houthi rebels raising concerns about the security of maritime transport in the Red Sea. These developments threatened potential effects on Saudi Arabia’s oil exports, as the kingdom’s production had already declined. 

The risk of supply disruptions extended beyond the immediate conflict zone. Several countries, including China, were tapping their strategic reserves for a significant proportion of their consumption, and their return to the market could increase demand during a period of restricted supplies. The physical damage to Gulf refining and production infrastructure from the conflict added another layer of uncertainty to global supply chains. Analysts noted that the geopolitical risk premium had returned to the market with diminishing prospects for an immediate diplomatic resolution, and that a sustained conflict could keep oil prices elevated for an extended period. 

September Surge of 20% Raises Questions on Fuel Price Trajectory 

The week’s price action capped a remarkable surge in crude oil prices during September 2026, with both benchmarks rising nearly 20% since the beginning of the month. Brent crude had gained more than 25% since early August, when hopes for a durable resolution to the six-month-old conflict had briefly emerged. The conflict, which began in late February, had seen Brent surge as high as $126.41 per barrel on 30 April before easing in subsequent months. 

The trajectory of crude prices in the coming weeks will depend on the evolution of the US-Iran conflict and its impact on global supply chains. The International Energy Agency and other multilateral bodies have been monitoring the situation closely, while major oil-producing nations have maintained their production quotas. The pressure on India’s import bill and the financial position of oil marketing companies will remain key considerations for policymakers, particularly as the rupee continues to face headwinds against the US dollar. 

Track Brent crude price movements around the $108 resistance level and WTI near $104, along with developments in the Strait of Hormuz and Bab-el-Mandeb shipping corridors. Monitor the Indian crude basket against the September average of $102.11 per barrel and its impact on the current account deficit. Observe retail fuel price adjustments in Delhi at ₹102.12 per litre for petrol and ₹95.20 per litre for diesel, alongside OMC margin trends. Review the rupee-dollar exchange rate and its influence on import costs. 

Source 

• https://ppac.gov.in/prices/international-prices-of-crude-oil 
• https://www.eia.gov/dnav/pet/pet_pri_spt_s1_d.htm