The escalation of the war in Iran has once again impacted global oil prices. Recent reports suggest an attack on Israel by Yemen's Houthis has led to further increase in oil prices.
The current state of the ongoing US-Iran war has had a massive impact across global markets. International crude oil prices rose more than 3% on the morning of March 30. The sudden rise comes after Yemen’s Houthi militants opened a new war front through drone and missile attacks on Israel.
The May contract of Brent crude on the Intercontinental Exchange was at $115.91 per barrel at 6:30 am. This price was up 3.00% from its earlier price. The May contract of West Texas Intermediate on the NYMEX surged by 3.03%, resulting in a price rate of $102.61 per barrel.
The geopolitical conflicts between the US, Iran, and Israel have now entered their fifth week. Reportedly, about 20% of gas and global oil supplies are halted due to supply chain disruptions.
The primary reason for the scarcity of oil and gas supplies is the blockage of the Strait of Hormuz. This has also resulted in the damage of several oil and gas facilities, refineries, and fields. Thus, raising the risk of an extension of this delay and scarcity in the long-term supply of oil and gas.
According to a report by Al Jazeera, on March 28, the Houthis, who control much of northern Yemen, launched two missiles and drone attacks on Israel within 24 hours. The Israeli army said the attacks were intercepted. However, the group pledged to continue fighting in support of resistance fronts in Iran, Lebanon, Palestine, and Iraq.
So, what does the rise in oil and gas prices mean for us Indians? The surge in oil prices carries significant implications for India. India imports about 90% of its crude oil requirements. The instability can create a supply crisis in India. However, on 26 March, the Indian crude oil market stood at $115.75 per barrel. This is quite low compared to the price range of $150 per barrel earlier this month. It will be interesting to see how oil prices react this week.