Global crude oil prices rose by more than 6% on Wednesday after US President Donald Trump declared an end to the ceasefire with Iran, following fresh American military strikes on the country. Brent crude, the international oil benchmark, increased by 6.52% to nearly $80 a barrel, while US benchmark West Texas Intermediate (WTI) surged by over 6% to around $75 a barrel.
Trump, speaking in Ankara during the NATO Summit, announced the new strikes against Iran in response to alleged Iranian attacks on commercial vessels in the Strait of Hormuz. He expressed strong criticism towards Iranian leaders, stating that he no longer wished to engage in negotiations with them, citing distrust and skepticism about any potential future agreements.
The escalation in tensions between the US and Iran, coupled with attacks on vessels in the key oil shipping route of the Strait of Hormuz, led to a significant spike in crude oil prices. This surge negatively impacted investor sentiment, with Indian equity markets experiencing widespread selling, as the Sensex dropped over 2% and Nifty fell by more than 2%.
The sudden increase in crude prices marked a notable shift from earlier expectations of ample supply, following OPEC+ announcing higher production quotas and increased output by major Middle Eastern oil producers. Additionally, the Indian rupee depreciated by 20 paise against the US dollar, opening at 95.15 and weakening to 95.16 in early trade.
