Oil Prices Stay Elevated Amid Strait of Hormuz Tensions, Raising Concerns for India’s Economy

Oil prices remained volatile amid continuing tensions in West Asia and uncertainty surrounding the Strait of Hormuz, increasing concerns over inflationary pressure and energy costs for major oil-importing nations like India.

New Delhi | May 13: Global crude oil markets remained under pressure on Tuesday as geopolitical tensions in West Asia and uncertainty over the Strait of Hormuz continued to keep energy traders on edge. Brent crude hovered above $106 per barrel while West Texas Intermediate (WTI) traded above $101, following three consecutive sessions of gains triggered by fears of prolonged supply disruptions.

The Strait of Hormuz, one of the world’s most critical oil transit routes, has remained at the centre of market concerns due to the ongoing Iran conflict and disruptions to shipping movement. Analysts estimate that nearly one-fifth of global oil supplies pass through the strategic waterway, making any interruption a major risk to global energy security.

Markets are also closely tracking diplomatic developments involving US President Donald Trump and Chinese President Xi Jinping, as the two leaders are expected to discuss trade, geopolitical stability, and China’s ties with Iran during ongoing talks. Investors believe the outcome of these discussions could significantly influence oil demand and supply expectations worldwide.

For India, the sustained rise in crude oil prices poses a significant economic challenge. The country imports more than 80 percent of its crude oil requirements, making it vulnerable to international price fluctuations. Higher crude prices could increase fuel costs, widen the trade deficit, and place additional pressure on inflation. The Indian crude basket has also witnessed a sharp rise in recent weeks alongside global benchmarks.

The situation is being closely monitored by the government led by Prime Minister Narendra Modi, as policymakers assess the possible impact on domestic fuel prices and the broader economy. Energy analysts warn that if tensions in West Asia continue or worsen, crude prices may remain elevated for an extended period.

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