Crude Oil Prices Surge 60% in 30 Days Amid West Asia Conflict

Mumbai, March͏ 23: Global ͏crude oil prices have surge͏d sharply͏ ͏ov͏er the ͏past month, rising nearly 60% amid͏ escalating͏ geopo͏litica͏l tensions in West͏ Asia tha͏t have severely disrupted ͏energy ͏supply ro͏utes. The sharp rally, ͏trig͏ge͏re͏d͏ by ͏the ongoing US–Iran–Isr͏ael confl͏ict, has pushed B͏rent͏ crude t͏o͏ aro͏u͏nd͏ $͏112 per bar͏rel, up fr͏om nearly͏ $70 a͏t ͏the onset of h͏ostilities͏, while US͏ benchm͏ark West Texas Interm͏ediate (WTI) hover͏ed near͏ $98.75 per barrel on͏ Monday.

͏Back͏ home, crude price͏s on͏ the Multi Commodit͏y Exchange (MCX) also reflected t͏he g͏lobal uptrend, ris͏ing 1.12% to ₹9,360 per barrel, signalling ͏sus͏tained ͏domest͏ic͏ mar͏ket alignment w͏ith intern͏ati͏onal pric͏e movemen͏ts.

͏Brent ͏At $11͏2,͏ WTI Near͏ $99 As 56͏% Mo͏nthly Surge Reflects͏ ͏Supply͏ Shock

Crude o͏il mark͏ets ͏hav͏e witnessed a ͏rapid escalatio͏n in pr͏ices over t͏he past 30 d͏ays, with gains of a͏pproximately ͏56%,͏ highlighti͏n͏g the s͏everi͏ty of the cu͏rrent suppl͏y disruption. Brent crude͏ briefly touch͏ed͏ $͏112.55͏ per ba͏rrel, w͏hile trading levels remained above $107 du͏ring early͏ se͏ssions on Mo͏nday. WTI cr͏ud͏e s͏imi͏larly cl͏imb͏ed to nearly $99, maintaining upward momentum after r͏ecent gains.

The͏ ͏s͏harp͏ rise is bei͏ng͏ att͏ributed to f͏ears of pro͏l͏onged supply ͏const͏raints r͏ather than dema͏nd-side expan͏sion. Ma͏rket activity indic͏at͏e͏s that traders are factorin͏g in͏ persistent disr͏uptions to global oil f͏lows, particularly from ͏the Gul͏f region,͏ which remains centra͏l to global ene͏rgy suppl͏y͏ chains.͏

Strait of Hormuz Risks 20% Global Supply, Driving Price Spike

The primary driver behind the rally is the escalating threat to the Strait of Hormuz, a critical maritime chokepoint responsible for transporting nearly 20% of the world’s crude oil and natural gas. Disruptions in tanker movement, rising insurance costs, and repeated threats to shipping routes have significantly impacted the flow of energy supplies.

The situation has intensified following warnings from the United States, which indicated potential strikes on Iranian power infrastructure if the Strait is not fully reopened. In response, Iran has warned of retaliatory actions targeting key energy assets across the region, raising concerns of broader infrastructure damage.

This ongoing standoff has transformed the conflict from a geopolitical issue into a direct economic risk, with supply chains increasingly under strain.

Qatar LNG Hit 17%, Iraq Output Falls to 900,000 Bpd

Beyond oil transit routes, direct attacks on energy infrastructure have further worsened supply conditions. In Qatar, strikes have damaged facilities impacting nearly 17% of its liquefied natural gas (LNG) export capacity, tightening global gas supplies.

In Iraq, authorities have declared force majeure across oilfields operated by foreign firms. Production at the Basra Oil Company has dropped sharply to 900,000 barrels per day, down from 3.3 million barrels per day, significantly reducing global output.

These disruptions collectively point towards a broader supply shock affecting both crude oil and natural gas markets simultaneously, amplifying the upward pressure on prices.

Global Supply Loss Hits 11 Million Bpd, Exceeds Past Crises

The scale of disruption is being compared to historical oil shocks, with current estimates suggesting a loss of approximately 11 million barrels per day (bpd) in global supply. This exceeds the combined impact of previous major oil crises, including those in the 1970s.

The magnitude of supply reduction underscores the structural nature of the disruption, with limited immediate alternatives available to offset the deficit. While some rerouting of oil flows through alternative ports has been attempted, the capacity remains insufficient to fully compensate for losses from the Gulf.

Indian Basket at $156, Import Burden Rises Sharply

India’s crude basket has surged to $156.29 per barrel, with the March average at $117.09, compared to $69.01 in February. Given that India imports nearly 85–90% of its crude oil, the price surge significantly impacts the economy.

A $1 increase in crude prices is estimated to add around ₹16,000 crore annually to the country’s import bill, intensifying fiscal pressures.

Markets React as Oil Above $110 Raises Inflation Risks

Elevated crude prices are already influencing global financial markets. Equity indices have witnessed sharp declines, while currencies and bond markets are adjusting to the prospect of higher inflation.

Oil prices above $110 per barrel are expected to transmit cost pressures across sectors, beginning with transportation and logistics, followed by consumer goods and core inflation. The ripple effect is likely to be felt across economies dependent on energy imports, particularly in Asia.

Simultaneously, precious metals such as gold and silver have seen price declines, reflecting shifting investor focus towards currency and fixed-income assets amid heightened uncertainty.

Brent Needs $120 Break to Test $130–135 Range

The near-term trajectory of crude oil prices remains closely tied to geopolitical developments. Analysts have raised their 2026 average price forecast for Brent crude to $85 per barrel from $77, while increasing their outlook for West Texas Intermediate to $79 per barrel from $72. Market expectations indicate that Brent crude may average around $110 in March and April, with the possibility of higher levels if supply disruptions persist.

Technical indicators suggest that $120 per barrel is a key resistance level. A sustained move above this threshold could open the path towards the $130–135 range, particularly if disruptions in supply continue over an extended period.

However, current pricing also reflects a degree of uncertainty, with markets balancing the possibility of de-escalation against the risk of prolonged conflict.

Red Sea and Bab-El-Mandeb Add to Supply Risks

Apart from the Strait of Hormuz, attention is also shifting towards the Bab-el-Mandeb Strait in the Red Sea, another crucial chokepoint for global shipping. Any escalation involving regional actors in this area could further amplify supply disruptions.

The combined risk across multiple transit routes highlights the vulnerability of global energy supply chains, particularly when geopolitical tensions impact both production and transportation simultaneously.

IEA Considers Stock Releases As Crisis Deepens

In response to the escalating crisis, the International Energy Agency (IEA) has already coordinated the release of 400 million barrels from strategic reserves, representing approximately 20% of total stockpiles.

Authorities have indicated that additional releases may be considered if market conditions worsen. However, such measures are viewed as temporary relief mechanisms rather than long-term solutions to the underlying supply constraints.

Retail Petrol & Diesel Prices in India Hold Steady Despite Crude Surge

Despite the sharp rise in global crude oil prices and heightened market volatility, retail petrol and diesel prices in India have remained largely unchanged.

Petrol & Diesel Prices (23 March)

Fuel prices in India are revised daily by oil marketing companies based on international crude prices and currency movements. However, despite the current surge, retail rates have shown limited movement, continuing the trend observed since May 2022, when excise duties and taxes were reduced.

The sharp rise in crude oil prices reflects a combination of supply disruptions, infrastructure damage, and geopolitical tensions centred around key global energy routes. With Brent crude sustaining above $110 per barrel and critical chokepoints under pressure, the situation remains fluid, with developments in West Asia continuing to play a decisive role in shaping global energy dynamics and economic conditions.

Sources:

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