Oil Prices Spike Over 4%: Will Iran-Israel Conflict Push Petrol, Diesel Rates Higher? Here’s What You Should Know

Global oil markets surged on Wednesday, reflecting a sharp rally in international prices overnight as the Iran-Israel conflict escalated. Brent crude futures jumped 4.4% to $76.45 a barrel, while US West Texas Intermediate (WTI) climbed 4.28% to $74.84. 

The spike followed a wave of missile strikes, gas field suspensions, and rising geopolitical tensions involving the U.S., fueling concerns about potential disruptions to global oil supply.

Technical analysts pointed to critical levels in Brent crude following the rebound.
“Brent Crude found support near its 200-day EMA and rebounded sharply by nearly 6% on Tuesday, closing at $75.98 and forming a robust bullish candle. Going ahead, the zone of $76.80–77 may act as a key resistance, while support lies around $73.50–73.20,” said Sudeep Shah, Head of Technical & Derivative Research, SBI Securities.

Strikes Disrupt Gas Fields but Exports Hold
While there was no substantial hit to global oil flows, Iran suspended production at its South Pars gas field—shared with Qatar—after an Israeli strike sparked a fire. Israel also targeted the Shahran oil depot, raising supply concerns, though export infrastructure has largely been spared so far.

In retaliation, Israel shut operations at two of its three major gas fields, which supply Egypt and Jordan. This disruption helped lift spot LNG prices to $13.5/mmbtu, up from ~$12 before the conflict.

A report by Emkay Global Financial Services summarised the delicate balance: “Iran has partially shut down its South Pars gas field… A major fuel depot and gas refinery were also affected; the impact on supply, however, seems to be restricted to domestic markets.”

Trump’s Comments Add Fuel to Fire
Adding to the tension, US President Donald Trump met with his national security team to discuss the Middle East situation. He later took to social media to post a provocative statement:
“We know exactly where the so-called ‘Supreme Leader’ is hiding. He is an easy target, but is safe there — We are not going to take him out (kill!), at least not for now,” Trump wrote, also calling for Iran’s “UNCONDITIONAL SURRENDER.”

The remarks have sparked speculation about potential US military involvement, which could turn a regional war into a global energy crisis.

Stable Supply May Cap Upside
Despite war jitters, Emkay continues to forecast Brent at $70/bbl for FY26, citing rising OPEC+ and non-OPEC production and healthy inventory levels.

“Oil markets have been well supplied so far in 2025… We continue to assume average Brent price at USD70/bbl for the year and expect prices to stabilize in a few weeks,” the report noted.

This level is seen as a “safe spot” for both upstream and downstream oil companies. Emkay expects OMCs (Oil Marketing Companies) like IOC, BPCL, and HPCL to benefit the most if Brent stabilizes, as it limits the risk of retail price cuts.

Gas Outlook Clouded by Israeli Shutdowns, Early Monsoons
India’s gas demand, especially from the power sector, is softening amid an earlier-than-usual monsoon, leading to concerns about volume downgrades.

“Players like Gujarat Gas, GSPL, PLNG, and GAIL… could see FY26 volumes coming in lower than expected,” Emkay noted, due to spot LNG exposure and lower power demand.
On the other hand, city gas players IGL and MGL, which currently have limited spot exposure, may be shielded in the short term.

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Wall Street Dips on Geopolitical Worries
US equities turned negative as investor risk appetite waned:
Dow Jones fell 299.29 points (-0.70%) to 42,215.80
S&P 500 lost 0.84% to 5,982.72
Nasdaq Composite dropped 0.91% to 19,521.09

Investors remain on edge as the Israel-Iran conflict shows no signs of easing, with broader economic implications now on the radar.