Oil On The Boil: Brent Crude Surges 2.4% As Middle East Ceasefire Doubts Grow
Brent crude jumped to $97.02 per barrel on Thursday morning. The rebound followed a 13% drop on Wednesday after the Trump-Iran truce news. Skepticism over the two-week ceasefire grows as Israel continues strikes in Lebanon. Indian markets watch OMCs (IOC, BPCL, HPCL) as import costs rise again.
- Republic Business
- 2 min read
The brief relief in global energy markets appears to be evaporating on Thursday morning as crude oil prices recovered, climbing towards the $97 mark. For India, the world’s third-largest oil consumer, the rebound threatens to rekindle concerns about domestic fuel inflation and the stability of the Rupee.
As of 10:40 AM IST (5:10 AM GMT), Brent crude futures, the international benchmark, surged by $2.27, or 2.4%, to trade at $97.02 a barrel. U.S. West Texas Intermediate (WTI) followed suit, jumping 3.3% to hit $97.50.
The ‘Ceasefire’
The surge comes just hours after oil prices plummeted by 13% following President Donald Trump’s announcement of a two-week ceasefire with Tehran. However, the optimism of the previous night has been replaced by morning-after skepticism. Reports from the Middle East suggest the situation remains highly volatile. While the U.S. and Iran have agreed to a temporary pause, Israeli Prime Minister Benjamin Netanyahu has clarified that the truce does not include operations in Lebanon. Fresh strikes on Hezbollah targets have raised fears that Iran may once again restrict traffic through the Strait of Hormuz.
What It Means For India
The sudden spike in prices as Indian markets opened on Thursday has put the focus back on the "Indian Crude Basket."
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- Fuel Prices: While OMCs like Indian Oil (IOC) and BPCL have kept petrol and diesel prices stable, a sustained climb back toward $100 per barrel will squeeze their margins, potentially forcing a retail price revision in the coming weeks.
- Dalal Street: Energy-heavy stocks and oil marketing companies are seeing cautious trading this morning. Investors are weighing the benefit of lower prices from Wednesday against the risk of a new price spiral on Thursday.
- Inflation Concerns: With over 85% of its oil imported, any crude shock at $100/barrel directly impacts logistics and transport costs across India, leading to broader inflationary pressure.
Analysts at Goldman Sachs have already cautioned that while they trimmed their Q2 forecast to $90 following the ceasefire, the risks remain "skewed to the upside." If the Strait of Hormuz remains obstructed or the ceasefire collapses before the two-week window, Brent could easily breach the $100 mark again.