Oil prices up 2% amid escalating war in West Asia, closure of Strait of Hormuz

Crude oil prices rose over 2% on Tuesday morning as the ongoing war in West Asia and fears of a prolonged disruption in the Strait of Hormuz pushed up global energy costs.

The spike underscores how geopolitical tensions can tighten supply and transmit price shocks to import-dependent economies like India, raising risks for inflation, fuel costs and household energy access.

At 7:43 am, the April contract of Brent crude on the Intercontinental Exchange was trading at $103.05 per barrel, up 2.83% from its previous close. The April contract of West Texas Intermediate (WTI) on NYMEX rose 2.61% to $95.94 a barrel.

Hormuz concerns

Prices have also been lifted by concerns over a prolonged blockade of the Strait of Hormuz, with little traction on US President Donald Trump’s proposal for a US-led naval coalition to ensure safe passage of vessels.

The Strait of Hormuz remains a critical chokepoint, with about 20% of the world’s oil and liquefied natural gas supplies passing through it.

A recent report by United Nations Trade and Development highlighted the scale of the risk.

“The Strait carries around one quarter of global seaborne oil trade, as well as significant volumes of liquefied natural gas and fertilizers. Military escalation in the region has disrupted shipping flows through this narrow passage, raising concerns about ripple effects across energy markets, maritime transport and global supply chains,” it said.

India impact

The volatility carries particular significance for India, which imports nearly 90% of its crude oil requirement.

The price of the Indian basket of crude oil—which reflects the rates at which domestic refiners procure oil—has surged sharply. As on 13 March, it stood at $136.56 per barrel, while the monthly average has climbed to $104.78, well above the earlier average of $69.01 per barrel.

A $1-per-barrel increase in crude prices sustained over a year could raise the country’s annual import bill by around ₹16,000 crore.

The Indian basket is a derived mix of sour grade crude (Oman and Dubai average) and sweet grade crude (Brent Dated), processed in a ratio of 78.71:21.29.

This has also tightened LPG availability, with delays in cargo arrivals and uneven distribution across regions. It has led to concerns over refill availability in some markets, particularly for commercial and bulk users.