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Oil Soars Past $90 as Iran Tensions Threaten Global Supply Routes

Crude oil prices surged sharply, with WTI futures jumping over 12% to cross $90 per barrel, marking the biggest weekly gain since April 2020. The spike follows heightened US-Iran tensions, intensifying fears of a prolonged conflict that could disrupt global energy supplies. Experts warn the situation could cause the largest oil supply disruption in history if flows through the critical Strait of Hormuz are severely affected, with tanker traffic already seeing a drastic drop. The volatility poses significant risks to the global energy sector, including major importers like India.

Key Points: Oil Prices Surge Above $90 on Iran Conflict Fears

  • WTI crude surges 12.2% to $90.90
  • Biggest weekly gain since April 2020
  • Strait of Hormuz shipments plummet to 5 tankers
  • Prolonged conflict risks historic supply disruption
  • Global energy sector and India face impact
2 min read

Oil prices cross $90/barrel on indications West Asia conflict may get prolonged

Crude oil prices spike over 12% as US-Iran tensions raise fears of prolonged conflict and disruption to vital Strait of Hormuz shipments.

"The war has significantly disrupted energy markets and heightened concerns about supply flows through the Strait of Hormuz - Apurva Sheth"

New Delhi, March 7

Crude oil prices shot up sharply, reportedly after the US President Donald Trump sought what he called "unconditional surrender" from Iran, intensifying worries about a prolonged conflict that could disrupt global energy supplies.

Crude Oil WTI Futures were 12.2 per cent up at USD 90.90 at the time of filing this report. It has seen its biggest weekly gain since April 2020, as per reports.

Escalating tensions in Iran and the wider West Asia region have intensified concerns over global crude oil supplies, with experts warning of sustained volatility that could potentially impact global energy sector, including India.

Apurva Sheth, Head of Market Perspectives and Research, SAMCO Securities said it seems that the ongoing conflict between the United States and Iran is likely to keep the prices elevated.

"The war has significantly disrupted energy markets and heightened concerns about supply flows through the Strait of Hormuz, one of the world's most critical oil shipping routes. Approximately 20% of global oil supply passes through this chokepoint, making it highly sensitive to geopolitical disruptions," Sheth said.

The war between the United States and Israel against Iran has the potential to be the largest oil supply disruption in history if oil flows via the narrow Strait of Hormuz remain low or come to a halt, said Jim Burkhard, Global Head of Crude Oil Research at S&P Global Energy.

"Initially, energy infrastructure had not been targeted by Iran, but that has changed with attacks on facilities in Saudi Arabia and Qatar. This adds a critical further dimension to the shock wave hitting oil and gas markets, according to a new S&P Global Energy analysis," Jim Burkhard said.

S&P Global Energy Commodities at Sea data shows that on March 1 only 5 oil tankers transited the Strait compared with around 60 tankers per day recently.

- ANI

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Reader Comments

S
Sarah B
The Strait of Hormuz data is alarming. Only 5 tankers vs 60 daily is a massive drop. This isn't just about prices, it's about actual physical supply. Hope our strategic reserves are adequate.
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Priya S
Every time there's tension in the Gulf, we pay the price. It's high time India accelerates its shift to renewable energy and reduces this dependency. Solar and wind projects need more push! 🌞
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Aditya G
While the geopolitical risk is real, I feel the media and analysts sometimes amplify the fear, causing prices to spike more than necessary. The "unconditional surrender" demand seems like posturing. Let's hope diplomacy prevails.
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Meera T
My husband drives an auto-rickshaw. Our entire family budget depends on fuel costs. News like this gives us sleepless nights. The government should consider some relief for transport workers if prices shoot up.
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Karthik V
This underscores the importance of the India-Middle East-Europe Economic Corridor (IMEC). We need more diversified and secure trade routes that aren't dependent on such volatile chokepoints. Long-term thinking is key.

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