Oil prices climb above $83 per barrel amid escalating Middle East tensions

Global crude oil prices surged on Thursday, rising more than 2 per cent as escalating tensions in the Middle East and disruptions in a key shipping route heightened concerns over supply.

Early trading saw benchmark crude on the Intercontinental Exchange climb to $83.26 per barrel for the April contract, marking an increase of around 2.43 per cent from the previous close.

Meanwhile, the April contract for West Texas Intermediate on the New York Mercantile Exchange rose 2.63 per cent to $76.63 per barrel.

The rally in prices comes amid heightened uncertainty around the Strait of Hormuz, one of the world’s most important oil transit routes. Reports indicated that a container vessel passing through the strait was struck by a projectile, causing damage to the ship and raising fears of further disruptions to shipping.

A sustained increase in crude prices could have significant implications for India, which relies heavily on imported energy. Analysts note that a $1 per barrel rise in crude oil prices sustained for a year could increase India’s import bill by approximately Rs 16,000 crore.

Government sources said India currently remains in a relatively stable position regarding energy supplies. The country has reserves equivalent to around 25 days of crude oil as well as petroleum products, including quantities already in transit aboard ships heading to Indian ports.

India imports more than 85 per cent of its crude oil requirements, with nearly half traditionally sourced from Middle Eastern producers whose shipments typically pass through the Strait of Hormuz. The recent escalation involving Iran has raised concerns over potential disruptions to these flows.

However, officials said India has gradually diversified its energy procurement in recent years, increasing imports from regions such as Africa, Russia and the United States, while also building strategic petroleum reserves to strengthen supply resilience.

As a result, a substantial portion of the country’s crude oil supplies no longer travels through the Strait of Hormuz.

According to official data, India spent about $137 billion on crude oil imports during the financial year ending March 31, 2025. In the first ten months of the current financial year, from April 2025 to January 2026, the country imported 206.3 million tonnes of crude oil worth approximately $100.4 billion.

With IANS inputs