Crude Oil Prices Soar to New Heights Amid Middle East Tensions

Global crude oil prices have surged to new heights due to fresh tensions in the Middle East. The US bombed five Iranian crude vessels in the Gulf of Oman and near Kharg Island, prompting Iran to attack 10 ships near the Strait of Hormuz. This has led to a sharp increase in Brent crude oil prices, which have risen above $100 a barrel.

The Indian crude basket, which reflects the actual landed or procured price paid by Indian state refiners, has also crossed the $100 mark, standing at $116 a barrel on September 10. This is a significant concern for India, which imports nearly 88 percent of its crude oil.

Experts warn that prolonged high prices will widen India's current account deficit and worsen inflation. Prashant Vasisht, senior vice-president and co-group head at ICRA, said, 'The renewed hostilities between Iran and US pose a challenge for the limited crude oil supplies coming through the Strait of Hormuz.'

India has been heavily reliant on Russian oil imports in recent months, with July imports from Russia comprising more than half of the country's total oil imports. However, this trend may be disrupted if global tensions escalate further.