Oil Prices Edge Higher as Hormuz Tensions Keep Markets on Alert
New Delhi, March 3 (TheTrendingPeople): Crude oil prices traded about 1% higher on Tuesday, showing signs of temporary stabilisation after surging more than 10% in the previous session amid escalating conflict in West Asia and concerns over supply disruption through the Strait of Hormuz.
US crude futures (WTI) rose 1.4% to $72.23 per barrel, while Brent crude gained 1.87% to trade at $79.2 in early Asian trade.
The spike follows retaliatory Iranian strikes reportedly targeting oil and gas infrastructure in Saudi Arabia, alongside threats to shipping lanes in the Strait of Hormuz — a chokepoint handling nearly 20% of global oil flows.
Markets had surged sharply on Monday amid fears of prolonged supply disruptions. However, some cooling was observed after the United States Department of State indicated that the administration would announce measures to address rising domestic energy prices. Secretary of State Marco Rubio said Treasury Secretary Scott Bessent and Energy Secretary Chris Wright would outline plans to manage price pressures.
Despite efforts to calm markets, the Hormuz risk continues to underpin oil prices. Over 40% of India’s crude imports transit the strait, making the country vulnerable to prolonged disruptions.
Analysts suggest that while India may absorb a short-term closure, a sustained blockade would necessitate further diversification. New Delhi has already been expanding sourcing from Russia, Africa and South America.
Investment bank Morgan Stanley warned that Brent crude could touch $120 per barrel in the event of a full-scale conflict leading to sustained disruption. Other projections indicate Brent could exceed $90 with limited disruption and cross $100 in a broader regional escalation.
For India, every $1 increase in crude prices adds approximately $2 billion to the annual import bill, straining the trade balance and potentially fuelling domestic inflation.
Future Outlook
Market participants are closely watching geopolitical developments and shipping security in the Gulf. A limited conflict could add $5–$10 per barrel, while direct damage to Iranian oil infrastructure may push prices up by $10–$12, according to market forecasts.
With tensions unresolved, volatility is expected to remain elevated. Energy-importing nations, including India, may need contingency plans to cushion economic fallout if disruptions persist.
Our Final Thoughts
Oil markets remain highly sensitive to geopolitical risk, and the Strait of Hormuz has once again emerged as a critical flashpoint. While temporary stabilisation offers some relief, sustained uncertainty could quickly reverse gains.
For India and other major importers, diversification and strategic reserves will be key tools in navigating potential supply shocks. The trajectory of the West Asia conflict will determine whether this remains a short-term spike or evolves into a prolonged energy crisis.