New Delhi, March 1 Brent crude could climb above $90 per barrel with Strait of Hormuz disruption or exceed $100 per barrel in a broader regional conflict, a report said on Sunday.
The report from JM Financial Institutional Securities said the crude has already climbed to about $72.8 per barrel and limited retaliation could add $5–10 per barrel, while direct damage to Iranian oil infrastructure could add $10–12 per barrel.
Every $1 rise in crude increases India’s annual import bill by about $2 billion, putting pressure on the trade balance, the report further said.
Around 20 per cent of global oil flows transit the Strait of Hormuz, with over 40 per cent of India’s crude imports using the route.
Markets are likely to move from earnings-driven to oil-driven trading in the near term, it said.
Upstream energy and defence may see relative support, while oil-sensitive sectors such as OMCs, paints, tyres, aviation and chemicals face margin pressure, the brokerage forecasted. Crude remains the key macro variable for Indian equities under the current escalation scenario.
“INR faces near-term depreciation bias, with potential RBI intervention through FX reserves. The transmission channel is clear: higher crude increases inflation risk; higher inflation pushes bond yields up; rising yields compress equity multiples,” the brokerage explained the crude price’s relation to equity markets.
Prolonged tensions may increase logistics and marine insurance costs, disrupt Gulf shipping routes and pressure the trade balance.
Upstream oil producers such as ONGC and Oil India may benefit from stronger realisations, while defence names including HAL and BEL could see sentiment support, the firm said.
The US-Israel strikes killed Iran’s Supreme Leader Ayatollah Ali Khamenei and many senior IRGC, intelligence and national security officials.
On Saturday, the United States and Israel launched coordinated strikes on Iranian nuclear facilities, missile infrastructure and command centres. Iran has since retaliated by launching missile and drone attacks on US bases across the Middle East.
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