Rising oil prices impact global fuel costs and strain economies dependent on Middle Eastern imports.
Chennai: Crude oil prices went past $100 per barrel on Monday and touched $120 in the early trade hours with the war in Iran continuing unabated. However, reports that G-7 countries would discuss the release of petroleum reserves cooled down the crude market to $105 levels.
The crude oil prices had closed near $94 per barrel on Friday. The tension in the Middle East continued during the weekend and after resuming trading on Monday, crude prices zoomed past $100 per barrel and touched $120. Both Brent crude and WTI crude were tracking similar movements. This was the first time, crude prices entered three digits after Russia’s Ukraine invasion in 2022, said Ajay Kedia, MD, Kedia Commodities.
Among the factors that pushed prices up, Iraq, the United Arab Emirates and Kuwait have cut production due to the effective closure of the Strait of Hormuz. On Saturday, Israel carried out air raids targeting Iran’s oil infrastructure.
Meanwhile, Islamic Revolutionary Guard Corps (IRGC) hinted at taking oil prices to $200 per barrel.
However, oil prices corrected to $103- $105 later in the day following the reports that the G-7 finance ministers would discuss the release of petroleum reserves in coordination with the International Energy Agency.
“Crude prices have surged nearly 65 per cent in less than seven trading sessions, which is highly unusual. The last time we saw a comparable situation was during the 1970s oil crisis, when disruptions in physical supply triggered a structural surge in prices, Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities.
What makes the current situation different from recent oil rallies is that the disruption is not merely perceived—it is linked to the choking of the Strait of Hormuz, a critical transit point through which roughly 20 per cent of global oil supplies move.
In terms of price levels, $125 per barrel is the immediate resistance zone. If prices break above that decisively, the market could begin targeting the 2008 highs near $145–$150. On the downside, $90 has now emerged as a critical support level; a move below that would likely signal meaningful de-escalation.
