Tensions in the Middle East have once again raised concerns about a wider conflict, with the confrontation involving the United States and Iran putting global energy supplies under pressure. The disruption around the Strait of Hormuz has triggered fresh concerns over crude oil supplies and could add to inflationary pressures in countries such as India.
Oil prices have remained highly volatile as shipping through the strategically important Strait of Hormuz has been severely affected. Reuters reported that only two commodity vessels crossed the strait on Monday, compared with a pre-conflict average of around 125 large commercial vessels a day. Two vessels were also reported to have been attacked, including an LPG tanker.
Iran Warns of Retaliation
Iran has indicated that it is prepared to respond to any attack and has threatened to target US military bases in the event of an American strike.
The continued confrontation has raised concerns about the security of one of the world’s most important energy routes. Any prolonged disruption in the Strait of Hormuz could affect the movement of crude oil and LPG supplies to international markets.
An LPG tanker, M.T. Al Maryah, was reportedly hit by a drone near the Strait of Hormuz. All 19 crew members, including nine Indians, were reported safe, and the vessel was later anchored safely at Khor Fakkan.
Crude Oil Prices Under Pressure
The growing uncertainty has pushed crude oil prices sharply higher and increased concerns over further price rises if supplies remain disrupted.
For India, higher international crude prices could increase pressure on fuel costs, transportation expenses and inflation. India imports more than 88% of its crude oil requirements, making global oil market disruptions particularly significant for the domestic economy.
US Pressure Over Russian Oil
At the same time, Washington has increased pressure on India and China over their purchases of Russian crude. US President Donald Trump has signed legislation giving him the authority to impose tariffs of up to 100% on countries that continue buying Russian oil and gas. The measure does not automatically impose such tariffs but gives the US president the power to decide whether and how they are applied.
India has maintained that its priority is energy security and continues to source crude from multiple suppliers. Any major reduction in Russian oil supplies could become more difficult amid the current disruption in other supply routes.
With geopolitical tensions continuing and shipping through the Strait of Hormuz severely restricted, global energy markets remain under pressure. A prolonged disruption could further increase crude oil, fuel and LPG costs, potentially adding to inflationary concerns in India.