Oil prices rose sharply on Thursday as renewed attacks on shipping in the Middle East heightened concerns about supply disruptions, while declining US crude inventories supported market sentiment. Brent crude futures gained 2% to $102.3 a barrel, while US West Texas Intermediate crude advanced 1.8% to $89.9 a barrel.Traders remained concerned about shipping security around the Strait of Hormuz, a crucial passage for global crude oil and petroleum product shipments. Strait of Hormuz attacks raise oil supply concerns
Recent attacks on vessels in the region have increased fears of interruptions to oil transportation, potentially affecting shipping operations, insurance costs and global energy supplies.
Although Gulf producers maintained exports and shipments recovered in September, continued security threats could discourage vessels from operating through the strategic waterway.The International Energy Agency has accelerated the release of oil from strategic reserves to ease supply pressures.However, emergency stock releases cannot replace lost production capacity, making their effectiveness dependent on the duration of disruptions.Meanwhile, US crude inventories declined by approximately 3.2 million barrels during the week ended Oct 2, exceeding analysts’ expectations of a 1.7-million-barrel reduction.US distillate inventories, including diesel and heating oil, also fell and remained below normal seasonal levels, adding to concerns about fuel availability.
Higher crude prices pose inflation risks for IndiaRising international oil prices could increase India’s import bill, weaken the rupee and widen the current account deficit, given the country’s dependence on imported crude.Higher energy costs could also affect transportation, logistics and manufacturing expenses, adding to domestic inflationary pressures and squeezing corporate profit margins.The increase comes after the Reserve Bank of India (RBI) raised its benchmark repo rate by 25 basis points to 5.5% on Wednesday.The central bank also shifted its monetary policy stance from neutral to calibrated tightening amid inflation concerns.Sustained crude price increases could complicate the RBI’s inflation outlook and future interest-rate decisions.Indian equity investors will closely monitor oil prices, foreign fund flows, currency movements and global bond yields for indications of broader market pressure.