Can India continue its balancing act after nuclear strikes in Iran?
For India, the immediate anxiety is economic because every $10 rise in Brent adds about $1bn a month to the import bill. A second priority is the safety of nearly 9mn Indians working in West Asia
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Hindustan Times
21 minutes ago
- Hindustan Times
Oil soars as Trump's attack on Iran ramps up risks to supplies
Oil surged after the US struck Iran's three main nuclear sites and threatened further attacks, exacerbating a crisis in the Middle East and stoking concerns that energy supplies from the region could be disrupted. A map showing the Strait of Hormuz and Iran is seen behind a 3D printed oil pipeline in this illustration taken June 22, 2025.(Reuters) Global benchmark Brent rallied as much as 5.7% to $81.40 a barrel, extending three weeks of gains. Timespreads widened. In a weekend address, US President Donald Trump said air attacks had 'obliterated' the trio of targets, and threatened more military action if Iran didn't make peace. In its initial reply, Tehran warned the strikes would trigger 'everlasting consequences.' The US assault — which targeted sites at Fordow, Natanz, and Isfahan — dramatically raises the stakes in the confrontation and increases the premium that traders are pricing into the global energy market. Still, the extent of the gains will hinge on how Tehran opts to respond to the US moves. The global oil market has been gripped by the crisis since Israel attacked Iran more than a week ago, with futures pushing higher, options volumes spiking along with freight rates, and the futures curve shifting to reflect tensions about tighter near-term supplies. The Middle East accounts for about a third of global crude output, and higher, sustained prices would boost inflationary pressures worldwide. 'This could set us on a path toward $100 oil, if Iran responds as they have previously threatened to,' said Saul Kavonic, an energy analyst at MST Marquee. 'This US attack could see a conflagration of the conflict.' There are multiple, overlapping risks for physical crude flows. The biggest centers on the Strait of Hormuz, should Tehran seek to retaliate by attempting to close the chokepoint. About a fifth of the world's crude output passes through the narrow waterway at the entrance to the Persian Gulf. Iran's parliament has called for the closure of the strait, according to state-run TV. Such a move, however, could not proceed though without the explicit approval of Supreme Leader Ayatollah Ali Khamenei. Rival Suppliers In addition, Tehran could opt to target crude infrastructure in rival suppliers in the Middle East, such as fellow OPEC producers including Saudi Arabia, Iraq or the United Arab Emirates. After the US attack, both Riyadh and Baghdad expressed concern about the targeting of the nuclear facilities. Elsewhere, Tehran could orchestrate attacks on ships on the other side of the Arabian peninsula in the Red Sea, encouraging Yemen-based Houthi rebels to harass vessels. After the US attacks, the group threatened retaliation. If the hostilities escalate, Tehran's own oil-producing capabilities could be targeted, including the key export hub at Kharg Island. Such a move, however, could send crude prices soaring, an outcome that America might want to avoid. So far, Kharg Island has been spared, with satellite imagery pointing to a drive by Iran to expedite its exports of oil. The crisis will also throw a spotlight onto the Organization of Petroleum Exporting Countries, and its allies including Russia. In recent months, OPEC has been relaxing supply curbs at a rapid clip seeking to regain market share, and yet members still have substantial idled capacity that could be reactivated.
Economic Times
an hour ago
- Economic Times
Rupee gains 14 paise on Trump hint of no Iran action for now, equity flows
The Indian rupee edged higher to 86.58 per dollar on Friday, marking its first gain in six sessions, fueled by inflows into domestic equities. This appreciation occurred despite high crude oil prices and ongoing tensions between Israel and Iran. Market sentiment was buoyed by signals from US President Trump suggesting a delay in action against Iran. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The Indian rupee modestly strengthened Friday, its first advance in six days tracking inflows into domestic equities, to close at 86.58 per dollar. The rupee climbed 14 paise despite volatile oil prices and no immediate signs of a truce in the Israel-Iran strength in the rupee came after US President Donald Trump signalled to avoid any precipitate action on Iran. Rebalancing of the FTSE Russell index also led to some flows, traders said. The rupee traded between 86.54 and 86.67 to the dollar on Friday. Brent crude oil prices remained elevated at $77 per barrel, while the dollar index was at 98. A rise in crude oil prices is detrimental to inflation in India as the country is a large importer of the commodity. "Chances of rupee strengthening are very low while crude oil prices are this high. The gain we have seen today is all because of Trump's comments to postpone strikes on Iran," said Anil Bhansali, head of treasury at Finrex Treasury Reserve Bank of India was likely absent today and did not intervene, traders said."The rebalancing flows of the FTSE Russell Index did help, but dollar demand was strong too, which countered the inflow," a trader said. Foreign investors bought Indian equities worth ₹7,940.7 crore on Friday."The only positive we have seen is that FPIs are not large sellers in Indian equities," Bhansali said.
Time of India
2 hours ago
- Time of India
Oil, inflation not immediate worries
NEW DELHI: Govt is drawing comfort from its diversified oil purchases but is keeping close tabs on the situation in the Strait of Hormuz, which accounts for nearly a fifth of global oil consumption, in the wake of the US attack on Iran. The Strait - which serves as the primary export route for Persian Gulf producers such as Saudi Arabia, the UAE and Iraq - is crucial not just for crude supply - but also cargo headed to West Asian markets. Amid the threat of disruption by Iran, govt sources indicated that other routes will be explored. With Brent spiking to $90 a barrel, the margin of the oil companies selling petrol and diesel will get eroded but is unlikely to result in changes in pump prices due to the recent excise duty related changes. Although Opec may impact the overall calculations, India is estimated to have imported more oil from Russia this month than the combined quantity of shipments from West Asia. India's strengthening of ties with Russia on crude purchases post-Ukraine conflict are expected to come to its aid to ensure that there is no disruption, sources said. Beyond oil, there may be concerns on gas as large quantities come from the Gulf region. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like This Wrinkle Cream Keeps Selling Out At Costco (Find Out Why) The Skincare Magazine Undo Besides, the price of piped cooking gas and CNG are linked to these and may impact the overall cost dynamics for industry too. Given that retail inflation in May had moderated to an over six-year low of 2.8%, price increase is not an immediate worry, but its future trajectory will weigh on policymakers, apart from adding to the already high levels of geo-political uncertainty. For trade, war risk insurance is seen to be a challenge, including its availability and pricing. "Overall demand will take a hit. There is massive uncertainty," said Fieo director general Ajay Sahai. "Simultaneously, the situation in nearby Red Sea is deteriorating. Following Israeli airstrikes on Houthi forces on June 14-15, tensions have escalated, placing India's westbound exports at fresh risk. Nearly 30% of India's exports to Europe, North Africa, and US East Coast transit through the Bab el-Mandeb Strait, which is now increasingly vulnerable. If security conditions force shipping to reroute via the Cape of Good Hope, delivery times could increase by up to two weeks, sharply raising costs for Indian exporters," added Ajay Srivastava of GTRI, a trade research body. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
