Brent Crude Surges to $94 Per Barrel Amid US-Iran Tensions

The Brent crude oil price has risen to nearly $94 per barrel, its highest level in nearly a month, due to supply uncertainty and fading hopes of a diplomatic breakthrough between Washington and Tehran. India, which imports around 85% of its crude oil requirements, is expected to face a higher import bill, greater dollar demand, and pressure on the rupee as a result.

Praveen Rai, director for oil markets at Grant Thornton Bharat, said that a $10 per barrel increase in crude prices can add around $12-15 billion to India's annual import bill. Umud Shokri, energy expert and senior visiting faculty at George Mason University, added that the impact would spread beyond fuel to freight, fertilizers, and food.

The Strait of Hormuz remains a major concern, with around one-fifth of global oil supplies moving through it before the US-Iran war began. Crude oil shipments from Russia's ports fell 15% in August due to disruptions at the Black Sea port of Novorossiysk following Ukrainian drone attacks.

The government may consider measures such as targeted subsidies and selective tax cuts, along with foreign-exchange measures, greater diversification of crude supplies, and the use of strategic petroleum reserves during a serious supply disruption.