- Geopolitical tensions boost oil prices, Brent crude nears $112.
- UAE nuclear facility attack escalates regional supply disruption fears.
- Drone strikes and US stance against Iran add pressure.
Global crude oil markets extended their rally on Monday, with Brent crude climbing above the $111 per barrel mark as fresh geopolitical tensions in West Asia reignited fears of a prolonged energy supply disruption.
The latest trigger came after a nuclear facility in the United Arab Emirates was attacked, intensifying concerns that the already fragile situation around the Strait of Hormuz could spiral into a wider regional conflict.
Oil Prices Jump Sharply Across Global Markets
International benchmark Brent crude rose as much as 2.37 per cent, or $2.60, to touch $111.86 per barrel, reported IANS.
US West Texas Intermediate (WTI) crude also surged 3.11 per cent, or $3.28, to $108.70 per barrel.
The rally was reflected in domestic commodity markets as well. Crude oil futures for June 18 delivery on the Multi Commodity Exchange (MCX) climbed to Rs 9,978, up 3.02 per cent, or around Rs 300.
The latest gains add to last week’s sharp rise, when crude prices had already surged more than 7 per cent amid fading hopes of a diplomatic breakthrough between Washington and Tehran.
Strait of Hormuz Back in Focus
A major factor driving oil prices higher remains the growing uncertainty around the Strait of Hormuz, one of the world’s most critical energy shipping routes.
Nearly one-fifth of global oil and liquefied natural gas shipments pass through the narrow waterway, which serves as a key export corridor for major producers including Saudi Arabia, Iraq and Qatar.
Concerns over disruptions in the region have intensified following reports of continued attacks, territorial seizures and rising military activity around the Strait.
Energy markets fear that any prolonged disruption could tighten global supplies further and push oil prices even higher.
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Drone Strikes Add to Regional Tensions
Oil markets received another jolt after reports emerged of a fresh wave of drone strikes targeting the UAE and Saudi Arabia.
According to reports, UAE authorities said they were investigating the source of the strike on the Barakah nuclear power plant and asserted the country’s right to respond to what it described as “terrorist attacks”.
The developments have added to fears that the conflict could spread across the wider Gulf region, potentially affecting energy infrastructure and shipping routes.
Trump Signals Tougher Stand on Iran
The geopolitical rhetoric also intensified after US President Donald Trump indicated a harder stance against Iran.
Trump said he had agreed with Chinese President Xi Jinping that Tehran must not be allowed to develop nuclear weapons and should reopen the Strait of Hormuz.
In a post on his Truth Social platform, Trump warned Iran that “the clock is ticking”, signalling growing pressure on Tehran amid stalled diplomatic efforts.
The comments further unsettled investors already worried about the possibility of a broader military escalation.
Asian Markets React to Oil Price Spike
Asian equity markets traded mostly lower as rising crude oil prices and geopolitical uncertainty weighed on investor sentiment.
Japan’s Nikkei fell around 1 per cent, while Hong Kong’s Hang Seng index declined more than 1 per cent.
South Korea’s KOSPI, however, bucked the broader trend and gained nearly 1 per cent.
Investors globally remain cautious as elevated oil prices threaten to increase inflationary pressures, raise transportation and manufacturing costs, and complicate policy decisions for central banks.
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Why Rising Crude Matters for India
For India, which imports a majority of its crude oil requirements, higher global oil prices have significant economic implications.
Elevated crude prices increase import costs, widen the current account deficit and add pressure on the rupee. They also raise concerns around inflation, particularly after recent hikes in petrol, diesel and CNG prices across the country.
Analysts say sustained crude oil prices above the $100 per barrel mark could increase pressure on government finances, oil marketing companies and household budgets in the months ahead.
