NewKerala.com

Brent Crude Soars 25% to $116.5 Amid West Asia Conflict, $150 Feared

Brent crude oil prices skyrocketed more than 25% to $116.5 per barrel amid intensifying multi-front conflict in West Asia involving Iran, Israel, and the United States. Market expert Ajay Bagga warns the price surge reflects a growing global oil shortage and a "Fear Premium," with potential to reach $150 per barrel. He states that such high oil prices, which are strongly correlated with food prices, will drive cost-plus inflation across the global economy. This could force central banks to tighten monetary policy and potentially trigger a global recession as demand is destroyed.

Key Points: Oil Prices Surge 25% on West Asia Conflict, Could Hit $150

  • Prices surged over 25% to $116.5/barrel
  • Conflict involves Iran, Israel, and the US
  • Expert warns of potential rise to $150
  • Spike reflects "Fear Premium" and shortage concerns
  • High prices could force central bank tightening and cause recession
3 min read

Brent crude surges over 25% to USD 116.5 per barrel amid West Asia conflict, experts warn of USD 150 level

Brent crude jumps over 25% to $116.5/barrel as Iran-Israel-US conflict escalates. Experts warn of prices reaching $150, fueling inflation and recession fears.

"Oil prices are rising 18 per cent to 20 per cent this morning... which may go up further to the USD 150 level on Brent. - Ajay Bagga"

By Nikhil Dedha, New Delhi, March 9

Brent crude prices surged sharply on Monday, rising by more than 25 per cent to USD 116.5 per barrel, amid the ongoing conflict in West Asia, which has made crude prices bullish.

During the trading session, crude prices also touched a high of USD 119.45 per barrel, reflecting growing concerns in the global energy market as geopolitical tensions intensify in the region.

West Asia is currently engulfed in a high-intensity, multi-front conflict involving Iran, Israel, and the United States. The crisis escalated following coordinated US-Israeli strikes on Iran, which reportedly resulted in the death of Iran's Supreme Leader, Ayatollah Ali Khamenei. The developments have significantly raised fears of supply disruptions in global oil markets.

Market experts believe that the ongoing tensions are pushing crude prices higher and could drive them further up in the near term.

Ajay Bagga, Banking and Market Expert, told ANI that oil prices are already reflecting the growing shortage concerns and risk sentiment in global markets.

"Oil prices are rising 18 per cent to 20 per cent this morning in Asia, transmitting a massive risk off to markets as fear takes centre stage. Oil prices are the basis of pricing in the economy. A 20 per cent global shortage of oil is now getting reflected in prices, which may go up further to the USD 150 level on Brent," Bagga said.

He added that the current rise in oil prices reflects a strong fear premium in global markets.

"This is the Fear Premium as at these levels there will be demand destruction across the global economy. Oil prices are strongly correlated to food prices, and bring in a cost plus inflation into the entire economy," he said.

Bagga further noted that the surge in oil prices could have broader implications for global economic conditions.

"Monetary policy tightening may be forced onto central banks if this inflation stays elevated for a longer time. Overall, these levels of inflation point to an incipient global recession on the back of aggregate demand turning negative as marginal consumers stop discretionary consumption and cut back on non-discretionary consumption," he added.

The sharp rise in crude prices has raised concerns across financial markets, as higher oil prices often lead to rising inflation and economic uncertainty globally.

Experts warn that if geopolitical tensions continue to escalate and supply disruptions persist, oil prices could remain volatile and may move towards the USD 150 level in the coming period.

- ANI

Share this article:

Reader Comments

S
Sarah B
While the geopolitical risk is real, I feel our media and some experts are amplifying the fear. Yes, prices are up, but panic only makes markets more volatile. We've weathered oil shocks before. Time for cool heads and long-term energy planning.
P
Priya S
USD 150 per barrel? My goodness. My monthly budget for the house is already stretched thin. This will break it completely. When will this instability end? Feeling very anxious for the months ahead.
V
Vikram M
This is the perfect wake-up call for India. We are too dependent on imported oil. We need to double down on renewables—solar, wind, green hydrogen. Also, why are we not exploring our own reserves more aggressively? Jai Hind!
R
Rohit P
The link to food prices is the scariest part. Oil price hike means fertilizer cost up, transport cost up. Next, dal and atta become costlier. The RBI will have a tough time managing inflation now. Tough days ahead for the economy.
M
Michael C
Working in the logistics sector, I see this first-hand. Freight rates are already adjusting. This will have a cascading effect on every single product in the market. Companies will pass the cost to consumers. Stagflation risk is real.
A
Ananya R

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50