Crude Surges͏ O͏ver ͏2% Ami͏d Strait ͏of Hormuz Supply Disruptio͏ns

Mumbai, M͏arc͏h 17: Cru͏d͏e oil pri͏ces cl͏imbe͏d sharply on Tuesday, reversing ͏previous session losses͏, ͏as ge͏opolitical tens͏ions in the Mi͏ddle Eas͏t continued to dis͏ru͏pt key shipping routes. Brent cr͏ude futu͏res ͏s͏urged͏ ͏by $2.48,͏ or 2.5%͏,͏ to $10͏2.69 per b͏arrel, w͏hile͏ US West Texas Intermediate͏ (WTI) crude rose $2.42͏, o͏r 2.6%, to $95.92 per ͏barr͏el, si͏gnalling ren͏ewe͏d concerns over tightening gl͏obal ͏oil supplies.

Strait of ͏Hor͏muz Blockade Pus͏hes Brent and WT͏I Highe͏r

The ͏Strai͏t of Hormuz, responsible for trans͏port͏i͏ng near͏ly 20% of global ͏oi͏l and liquefi͏ed natural g͏as, re͏mains l͏ar͏gel͏y ob͏stru͏cted d͏ue to͏ the ͏ongoing US-Israel conflict with Iran, now͏ entering its thir͏d week͏. ͏European ͏n͏a͏tions have ͏declined US͏ Pre͏sident Donald Trump’s request to depl͏o͏y NATO ͏warshi͏p͏s for t͏anker escort,͏ raisin͏g fears ͏of further supply disrupti͏ons.

The disruption has already forced the United Arab Emir͏ates (UAE), the thir͏d-larges͏t produ͏cer in the O͏rganis͏at͏i͏o͏n ͏of the Petroleum Expor͏ting Coun͏tr͏ies (OPEC), to sl͏as͏h output͏ ͏by more than 50%, according͏ t͏o ͏Reuters sources. Analysts warn that ͏c͏ontinued bl͏ockade and ͏es͏c͏al͏atin͏g reg͏ional tensions could ͏further strain͏ global e͏nerg͏y market͏s and exacer͏b͏ate inflati͏onary pressures wo͏rldwide.

US Allies Decline Naval Support, Heightening Global Supply Risks

President Trump criticised Western allies for their refusal to support the passage through the strait, stating that NATO could face “a very bad future” if member countries failed to act. This diplomatic standoff has amplified market anxiety, as any further obstruction or military escalation could halt crude exports from critical Gulf producers.

Meanwhile, Iran has requested India to release three tankers seized in February, part of ongoing negotiations to secure safe passage for Indian-flagged or India-bound vessels through the Strait of Hormuz.

UAE Production Cuts and Strategic Reserve Interventions

With shipping routes constrained, UAE production has fallen drastically, directly impacting the supply of Middle Eastern crude. The International Energy Agency (IEA) has indicated that member countries may release additional oil from strategic reserves beyond the 400 million barrels already committed to stabilise markets.

Analysts suggested that Brent crude prices could breach $120 per barrel in the near term if the conflict persists, while Elara Securities warned that further escalation into the $110–$125 range could strain fiscal policies and widen earnings disparities among oil and gas companies.

MCX Crude Oil Follows Global Rally with 2.29% Gains

India’s Multi Commodity Exchange (MCX) mirrored the international trend, with crude oil trading 2.29% higher at ₹8,872 per barrel. This upward movement follows global benchmarks and reflects both supply constraints and ongoing geopolitical uncertainty.

Despite volatility abroad, domestic petrol and diesel prices have remained unchanged. In Delhi, petrol is priced at ₹94.77 per litre and diesel at ₹87.67 per litre, while in Mumbai petrol costs ₹103.49 per litre and diesel ₹90.03 per litre, reflecting the government’s current pricing framework and absorption by state-run oil marketing companies (OMCs).

Global Geopolitical Tensions Fuel Middle East Crude Benchmarks

Middle East crude benchmarks have surged to all-time highs amid the US-Israel-Iran conflict. A fire at the Fujairah Oil Industry Zone following a drone attack briefly added to supply concerns, though no injuries were reported.

Analysts noted that markets are fixated on the duration of the conflict, halted supplies at Hormuz, and potential damage to Gulf oil infrastructure. They highlighted the fragility of shipping lanes, emphasising that a single missile or mine incident could reignite supply fears.

Indian Fuel Market Remains Stable Despite Volatility

Domestic auto fuel rates have held steady for over a week, despite Brent crude hovering near $103 per barrel:

• Petrol: ₹94.77 per litre in Delhi, ₹103.49 per litre in Mumbai
• Diesel: ₹87.67 per litre in Delhi, ₹90.03 per litre in Mumbai
• Domestic LPG: ₹913 per 14.2 kg cylinder, reflecting a ₹60 increase from February
• Commercial LPG: ₹1,884.50 per 19 kg cylinder

The three major Indian OMCs—Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL)—continue to adjust retail prices daily in line with international crude benchmarks and exchange rate fluctuations.

Inflation Pressures Rise With Wholesale Price Index at 11-Month High

Rising crude has pushed India’s Wholesale Price Index (WPI) inflation to 2.13% in February, the highest in 11 months, up from 1.81% in January. Food articles saw inflation of 2.19%, while vegetables eased slightly to 4.73%. Pulses, potatoes, eggs, meat, and fish recorded higher month-on-month price increases.

Fuel and power deflation narrowed to 3.78%, compared with 4.01% in January, while the average price of the Indian crude basket reached $101.25 per barrel, marking a 44-month high. Barclays highlighted that WPI will likely reflect ongoing crude price surges, as retail fuel prices remain unchanged under current policy.

Consumers can expect domestic petrol and diesel prices to remain stable for now, even as international crude exceeds $103 per barrel, while LPG and CNG prices reflect adjustments in supply costs. Continued monitoring of Middle East tensions and domestic fuel policies is essential for planning household energy budgets, as wholesale inflation shows signs of rising in response to global crude volatility.