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Informist, Monday, Mar. 2, 2026

 

By Ashutosh Pati

 

MUMBAI – International crude oil prices jumped up over 7% Monday and are likely to rise further in the short term until there is a resolution to the military conflict in West Asia, analysts said. Brent crude oil prices could touch $80-$85 per barrel and the West Texas Intermediate crude could reach $75 per barrel this week if the conflict continues. In case this turns out to be a prolonged war, oil prices could even touch $100 per barrel. However, market participants are hopeful the military conflict will end soon.

 

Saturday, the US and Israel attacked Iran, killing Iran's Supreme Leader Ayatollah Ali Hosseini Khamenei. Iran has since retaliated, targetting US military facilities around the Persian Gulf. Market participants' biggest fear of a closure of the Strait of Hormuz has come true, which is driving the current spike in crude oil prices. A fifth of the global crude oil supply flows through the Strait of Hormuz.

 

"With approximately 20% of global oil supply now at risk, the market is pricing in a massive geopolitical risk premium," Ajay Kedia, director of Kedia Stocks and Commodities Research Pvt. Ltd., said in a note. "Despite a higher-than-expected production increase from OPEC+, the sheer scale of the potential supply disruption has sent traders into a buying frenzy, eyeing the psychological $100 mark," he added.

 

At 1926 IST, the May futures contract of Brent crude oil on the Intercontinental Exchange was $79.22 per barrel, up around 9%. The April contract of West Texas Intermediate crude on the New York Mercantile Exchange was up almost 8% at $72.29 per barrel.

 

"...until the tension is going on (in West Asia), the prices will be on the upside and probably the WTI could reach around $75 a barrel this week and Brent could be around $85-$86 a barrel," Manoj Jain, director of commodity brokerage Prithvi Finmart, said. "...as of now, looking to the present situation, there is a possibility that WTI could test $80 (a barrel) and Brent could likely (test) $90-$92 a barrel," in a month, Jain added.

 

Jigar Trivedi, senior research analyst at Reliance Securities, said prices may "retrace a bit" since they have already risen around 9%. However, if the ongoing geopolitical tensions between the US-Israel and Iran escalate, there could be a further spike in oil prices, Trivedi said. "The closure of the Strait of Hormuz could potentially push prices up to $90/bbl as well since one fifth of the global oil passes through it," he added.

 

While Trivedi believes negotiations will begin in three to four days, Prithvi Finmart's Jain said it could take as long as four to six weeks for the military conflict to settle.

 

Meanwhile, the Organization of the Petroleum Exporting Countries and its allies Sunday decided to resume the unwinding of 1.65 million barrels per day of additional voluntary production cuts announced in April 2023. Eight member nations of OPEC and allies--Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman--agreed to implement a production hike of 206,000 barrels per day for April.

 

"The fundamental landscape is being reshaped by more than just military action. While OPEC+ agreed to increase production by 206,000 barrels per day starting in April, market participants view this as a "drop in the bucket" compared to the potential loss of Iranian and Gulf exports," Kedia said.

 

In the event of significant disruptions to oil supply, "the quickest action we are likely to see from governments is a coordinated release of oil from strategic petroleum reserves," Warren Patterson, head of commodities strategy at ING Economics, said in a note. OPEC and its allies could also potentially help through more supply increases. "However, if we do see sizeable supply disruptions due to this conflict, this supply is not going to move the needle much," Patterson said.

 

In addition, a key issue is that the bulk of OPEC's spare capacity sits in the Persian Gulf. Therefore, if the Strait of Hormuz is blocked, this additional supply will be of little help to the market, he added.

 

If there aren't any major supply disruptions and the hostilities end, the entire risk premium in crude oil prices could be wiped out, taking prices back to $60-$65 per barrel levels, analysts said. With $90-$95 per barrel also a possibility, the only thing certain in the crude oil market in the coming days is volatility.  End

 

US$1 = INR 91.47

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Ashish Shirke

 

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