Crude Oil Surges Over 7% Weekly as US-Iran Conflict Intensifies; Brent Tops $94 Per Barrel

Mumbai, Aug 22: Crude oil markets witnessed a volatile and sharply bullish week from 16 August to 21 August 2026, with both international and domestic benchmarks recording substantial gains. Brent crude, the global benchmark, surged over 7% for the week, while West Texas Intermediate (WTI) climbed more than 8%, marking the second consecutive weekly advance for both contracts. The rally was driven by escalating geopolitical tensions between the United States and Iran, disruptions to shipping through the Strait of Hormuz, and a series of Ukrainian strikes on Russian energy infrastructure. 

Brent Surges Past $93, Hits One-Month High of $94.71; WTI Crosses $87 

International oil markets exhibited strong upward momentum throughout the week. Brent crude futures traded above $93 per barrel on Friday and were on track to post a second consecutive weekly gain, rising more than 5% so far that week. By Friday, Brent crude futures dipped slightly by 0.3% to $93.40 a barrel, while US West Texas Intermediate crude slipped 0.55% to $86.30 a barrel. Despite the modest pullback on the final trading day, both benchmarks remained sharply higher for the week as investors assessed the impact of the prolonged US-Iran conflict on crude production and shipments from the Middle East. 

On Thursday, August 20, oil prices jumped more than 2% to settle at the highest in nearly a month. Brent crude futures settled up $2.16, or 2.4%, at $93.78 a barrel, the highest since 24 July. US West Texas Intermediate crude futures for September gained $2, or 2.3%, at $87.83 a barrel, also the highest level since July 24. The session also saw Brent touch a one-month high of $94.71 per barrel before paring some gains. 

Also Read: How to invest in crude oil 

Earlier in the week, on Wednesday, August 19, oil prices hit a three-week high as uncertainty over shipping through the Strait of Hormuz and ongoing supply disruptions supported the market. Brent crude futures climbed 54 cents, or 0.59%, to $91.56, while US West Texas Intermediate crude futures were up 59 cents, or 0.69%, to $85.53 a barrel. Brent crude hit its highest level since July 30, and WTI reached its highest since July 31. On Tuesday, August 18, Brent crude futures rose 26 cents, or 0.29%, to $91.28 a barrel, while US West Texas Intermediate crude gained 37 cents to trade at $85.31 a barrel. 

By the end of the week, Brent crude was up more than 7%, while WTI had surged over 8%, with both benchmarks reaching their highest levels since July 24. 

US Threatens Iran with Economic Isolation as Gulf Tensions Lift Oil Risks 

The week’s oil market rally was fuelled by escalating tensions between the US and Iran, with Washington threatening unprecedented economic pressure on Tehran. US President Donald Trump warned countries against providing financial or commercial support to Iran, signalling measures targeting banks, businesses, shipping networks and other channels that could provide economic lifelines. The announcement followed the UAE’s suspension of financial and economic transactions with Iran, after accusing Tehran of launching ballistic missiles at its territory. The move could further isolate Iran, a major player in the global energy market. 

US Treasury Secretary Scott Bessent said further details of Washington’s measures would be announced on Monday. Meanwhile, US forces continued to maintain a naval blockade of Iranian ports, while heightened tensions around the Strait of Hormuz raised concerns over global energy supplies. The conflict, which began on February 28, has disrupted oil and gas flows across the region, adding a significant geopolitical risk premium to crude prices. 

US-Iran Tensions Deepen as Economic Pressure Threatens Oil Supplies 

The week’s oil rally was driven by escalating US-Iran tensions, with Washington threatening unprecedented economic pressure on Tehran. US President Donald Trump warned countries against providing financial or commercial support to Iran, raising the prospect of measures targeting banks, businesses, shipping networks and other economic channels.  

The announcement followed the UAE’s suspension of financial and economic transactions with Iran after accusing Tehran of launching ballistic missiles at its territory. The move could further isolate Iran and disrupt its economic activity. Meanwhile, US forces maintained a naval blockade of Iranian ports, while tensions around the Strait of Hormuz heightened concerns over global energy supplies. The conflict has disrupted regional oil and gas flows, adding a geopolitical risk premium to crude prices. 

MCX Crude Oil Futures Surge to ₹8,300; Fifth Consecutive Session of Gains 

The domestic bullion market mirrored the global trend, with crude oil prices climbing on the Multi Commodity Exchange throughout the week. On Monday, August 17, crude oil futures opened higher and gained momentum as geopolitical tensions intensified. 

By Wednesday, August 19, MCX crude oil futures were trading at ₹8,137 per barrel, up 0.61% on the day, having opened higher and hit around ₹8,150 per barrel in morning trades. The counter was close to its three-week high of ₹8,170 posted on Tuesday. August crude oil futures were trading at ₹8,192 on the MCX during the initial hour of trading on Wednesday against the previous close of ₹8,143, up by 0.60%. 

On Thursday, August 20, crude oil futures rebounded from early losses to gain more than 1%, tracking firm global trends as fresh US sanctions aimed at isolating Iran stoked concerns over possible disruptions to global oil supplies. On the Multi Commodity Exchange, crude oil for the September delivery appreciated by ₹96, or 1.18%, to ₹8,247 per barrel. The October contract also advanced ₹91, or 1.14%, to ₹8,097 per barrel on the MCX. The rally marked the fifth straight session of gains for MCX crude futures, as investors weighed the impact of the latest US pressure on Iran’s oil trade. Analysts said the market is now pricing in the risk of tighter Iranian crude flows, with the Strait of Hormuz once again emerging as a key pressure point. 

By Friday, August 21, MCX Crude Oil was holding near ₹8,300 per barrel. The sustained rise in domestic crude prices reflected the strong global cues and the weakening of the Indian rupee against the US dollar, which made imports more expensive. 

Petrol and Diesel Prices Remain Largely Stable Despite Crude Rally; Hyderabad Records Highest Rates 

Despite the sharp rally in crude oil prices during the week, retail petrol and diesel prices across major Indian cities remained largely stable, with oil marketing companies continuing to shield consumers from global oil price volatility. Fuel prices are revised daily at 6 am by oil marketing companies and natural gas distribution companies, but the pass-through of higher crude costs to retail consumers was not immediate during the week. 

On Friday, August 21, petrol and diesel prices remained unchanged across major cities. Petrol prices varied significantly across cities due to differences in state and local taxes, freight costs, and distribution expenses. Hyderabad recorded the highest petrol price at ₹115.69 per litre, followed closely by Thiruvananthapuram at ₹115.49 per litre. Mumbai, the financial capital, saw petrol priced at ₹111.18 per litre, while Kolkata recorded ₹113.47 per litre and Chennai ₹107.77 per litre. New Delhi, the national capital, had the lowest petrol price among the metros at ₹102.12 per litre, while Chandigarh continued to have the lowest petrol price among listed cities at ₹98.10 per litre. 

For diesel, Thiruvananthapuram recorded the highest price at ₹104.40 per litre, followed by Hyderabad at ₹103.82 per litre. Mumbai diesel was priced at ₹97.83 per litre, Kolkata at ₹99.82 per litre, Chennai at ₹99.55 per litre, and New Delhi at ₹95.20 per litre. 

On Thursday, August 20, petrol and diesel rates also remained at the levels listed for that day, with Brent crude trading close to $92 a barrel amid continued uncertainty in the Middle East. The petrol price in Mumbai stood at ₹111.12 per litre, while diesel was priced at ₹97.78 per litre. In Bengaluru, petrol was available at ₹110.93 per litre and diesel at ₹98.79 per litre. 

Oil Supply Disruptions Push Prices Higher as India Faces Import and Rupee Pressure 

Supply disruptions and declining fuel inventories added to upward pressure on global crude prices, while the impact was particularly significant for India given its high import dependence. Russian oil shipments from western ports fell to around 2.3 million barrels per day in the first half of August, 15% below the initial loading plan, following disruptions at the Black Sea port of Novorossiysk. Ukrainian strikes on Russian energy infrastructure also contributed to fuel shortages in some regions. In the US, distillate inventories declined for a third consecutive week, although crude stocks unexpectedly rose by 4.4 million barrels to 428.8 million, against expectations of a 600,000-barrel draw. Meanwhile, OPEC+ approved an additional 188,000 barrels per day of output for August, but the increase was relatively small compared with ongoing supply disruptions. 

For India, which imports more than 85% of its crude oil requirements, higher prices increase the import bill and can pressure the rupee by raising dollar demand among importers. Elevated crude prices can also add to inflationary pressures through higher energy costs, potentially complicating the Reserve Bank of India’s monetary policy outlook if the rise proves persistent. 

Crude oil prices rallied sharply, with Brent rising over 7% and WTI more than 8%, driven by escalating US-Iran tensions and disruptions around the Strait of Hormuz. MCX crude approached ₹8,300, while Indian fuel prices remained largely stable. 

Source 

• https://ppac.gov.in/prices/international-prices-of-crude-oil 

• https://www.eia.gov/dnav/pet/pet_pri_spt_s1_d.htm