New Delhi, March 2 (NationPress) Global crude oil prices have jumped by over 7% on Monday due to escalating conflicts in the West Asia region, following military strikes by the US and Israel on Iran.

Brent crude futures have reached $82.37, marking the highest levels since January 2025, with prices increasing by 7.60% to $78.41 a barrel. In addition, the US West Texas Intermediate (WTI) crude futures saw a rise of 7.19%, reaching $71.86.

Reports indicate that Iran has halted navigation through the critical Strait of Hormuz, leading governments and refiners to reevaluate their oil reserves.

In response to the US-Israeli strikes, OPEC has decided to increase oil production next month, with key contributors like Saudi Arabia and Russia adding an additional 206,000 barrels per day.

Experts suggest that the strikes on Iran are a major geopolitical shock, which has heightened the global oil risk premium and increased the demand for safe haven assets such as gold and silver.

Rajeev Sharan, Head of Criteria, Model Development and Research at Brickwork Ratings, stated, “For India, which relies on imported crude for nearly 90% of its needs, any prolonged increase in Brent prices will lead to higher fuel costs, inflation, and an expanded current account deficit. This scenario complicates the RBI’s efforts towards disinflation and may postpone rate cuts.”

Indian stock markets have already adopted a risk-off approach, anticipating increased volatility, foreign capital outflows, and pressure on sectors like automobiles, finance, and energy.

As long as tensions escalate, precious metals are expected to remain robust.

The conflict premium is likely to diminish only when there is clarity regarding leadership in Tehran, credible pathways for de-escalation, and guarantees that essential oil routes such as the Strait of Hormuz remain accessible, according to Sharan.

Should disruptions in the Strait of Hormuz continue, Brent crude prices might exceed $90 per barrel, and could potentially surpass $100 per barrel if there is a wider regional conflict.

JM Financial Institutional Securities highlighted that a $1 increase in crude oil could raise India's annual import expenses by around $2 billion, further straining the trade balance.

The Strait of Hormuz is a crucial route, with approximately 20% of global oil flows passing through it, and over 40% of India’s crude imports reliant on this passage. The market is anticipated to shift from earnings-based to oil-centric trading in the near future.

Prolonged conflict could lead to increased logistics and marine insurance costs, disrupt Gulf shipping routes, and put additional pressure on the trade balance.