Brent crude has climbed to close to $110 a barrel as escalating political tensions in West Asia and strain on supply chains unsettle global markets. The sudden breakdown of proposed talks between the United States and Iran has added fresh doubts over energy availability, and analysts warn prices could move past $115 to $120 a barrel if conditions deteriorate.
The Strait of Hormuz remains the focal point of the volatility. A large share of the world’s crude oil is shipped through the waterway, and any disruption to cargo movement there could trigger shortages and send prices sharply higher. Attacks on vessels at sea and threats from Houthi rebels are cited as additional factors raising the risk of supply interruptions.
Investors are closely watching weekly data from the American Petroleum Institute, inventory levels at Cushing and broader US crude stockpile figures. A recent unexpected drawdown of 8 million barrels in US crude inventories added to upward pressure on prices.
Navneet Damani, head of commodities research at Motilal Oswal Financial Services, said physical supply constraints on the ground continue to drive the market, even when US-Russia agreements or proposals to ease sanctions emerge.
The impact is already visible in India. Crude oil futures on the Multi Commodity Exchange (MCX) have risen about 6.4 percent in a week to Rs 9,394 per barrel. If risks in West Asia intensify, petrol and diesel prices in India could also face significant upward pressure.