Global crude oil prices surged above $100 per barrel on Friday due to escalating geopolitical tensions in the Gulf. Brent crude, the international benchmark, increased by 0.43% to stay above $100, while US West Texas Intermediate (WTI) crude rose by 0.69% to $92.83 per barrel.
In the domestic market, crude oil futures for August delivery on the Multi Commodity Exchange (MCX) were trading at Rs 8,865 per barrel, showing a decrease of Rs 159 or 1.76% around 10 a.m.
Market experts attributed the spike in oil prices to an attack by Iran-backed Houthi forces on Saudi tankers in the Red Sea. This attack, along with ongoing disruptions in the critical oil transit routes of the Strait of Hormuz, has heightened concerns over global energy supplies.
The recent surge in Brent crude to around $100 is primarily due to the attack on Saudi tankers by the Iran-backed Houthis in the Red Sea, experts noted. The renewed geopolitical tensions and diminishing hopes of a ceasefire have rekindled fears of sustained inflation.
The rise in oil prices coincides with escalating conflicts in the region. Following the breakdown of an interim truce two weeks ago, the US conducted fresh air strikes on Iran, which retaliated by reportedly firing missiles at neighboring Arab countries hosting US military bases, raising worries about prolonged supply disruptions.
The sharp increase in oil prices had a negative impact on global equity markets. Asian markets, including Japan’s Nikkei, Hong Kong’s Hang Seng, and South Korea’s KOSPI, witnessed significant declines. Wall Street also closed lower, with the S&P 500 dropping 1.21% and the Nasdaq falling 2.15%, driven by concerns that elevated energy prices could lead to prolonged inflation.
