Global oil prices soared above $100 per barrel as Iran clarified it was not directly negotiating with the US to resolve conflicts. Brent crude futures reached $103.46 per barrel, with US West Texas Intermediate (WTI) crude hitting $91.54 per barrel amidst escalating tensions in the Middle East.
Iran’s Foreign Minister, Abbas Araghchi, emphasized that talks between Tehran and Washington through intermediaries should not be misconstrued as negotiations. Iran is likely to turn down a US-proposed ceasefire initiative.
Previously, international crude oil rates experienced a significant drop due to expectations of a peace agreement in the West Asia region. Analysts suggest that the recent oil price correction could provide some relief to India’s macroeconomic indicators, such as inflation and the Current Account Deficit (CAD).
A $10 per barrel fluctuation in crude prices typically affects India’s CAD by 0.3–0.5 percentage points of the GDP and raises CPI inflation by 20–30 basis points, depending on the pass-through effect.
Iran announced that it will permit vessels from five “friendly” nations, including India, to pass through the Strait of Hormuz. However, access remains restricted for vessels from other countries. Vessels from Russia, China, Pakistan, and Iraq have also been granted safe passage through the strait despite the ongoing conflict.
Simultaneously, Iran specified that ships from countries considered adversaries or involved in the current crisis, such as the United States, Israel, and certain Gulf nations, would not be allowed passage through the strait.
