Crude Oil Price Hike: After a brief decline in the prices of crude oil, it is now on the rise again. There has been turmoil in global markets after US President Donald Trump announced the cancellation of the peace agreement between America and Iran. Due to this, a rise in the prices of crude oil is again being seen in the global oil market. On Thursday, crude oil prices increased by another 1%, whereas in the previous trading session it had increased by up to 5%.

What is the price of crude oil today?

With the latest increase, today Brent crude is trading around $ 78.80 per barrel. At the same time, American Crude (WTI Crude) has also increased by 1.01% and reached the level of $ 74.26 per barrel, which is gradually moving towards the psychological level of $ 80. Yesterday, the July futures contract on India’s Multi Commodity Exchange closed at Rs 7155 per barrel with a record rise of about 6.71%.

Why are prices increasing suddenly?

The renewed military attack between America and Iran has increased the risk of disruption of oil supply through the Strait of Hormuz. This sea route is very important for energy shipment. About 20% of the world’s crude oil reaches every corner through this narrow route.

Another reason for the sudden increase in oil prices is the withdrawal of concessions given by the US Treasury Department to Iran to sell crude oil legally. Due to this, the risk of shortage of crude oil in the global market has also increased.

Movement of ships stopped on Hormuz

According to Bloomberg report, due to the deteriorating situation between America and Iran, the movement of oil tankers and LNG ships on Hormuz has been stopped. Sensing the danger, many ships are now turning towards the ‘Cape of Good Hope’. Hormuz is an important sea route related to energy shipment, on which many countries like Saudi Arabia, Kuwait, Iran, Iraq depend. In such a situation, due to its stoppage, there may suddenly be a huge shortage of crude oil in the world.

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Brent & WTI Decline: There has been positive progress in the ongoing peace talks between America and Iran. With this, the market is hopeful that the ‘Strait of Hormuz’, which was closed for the last 3 months, will reopen and the supply of crude oil in the world will become normal.

After this news, the prices of Tej have fallen sharply in the international markets today. Global benchmark Brent crude fell 5.4% to $97.97 a barrel, while West Texas Intermediate was trading below $92.

This fall in crude oil prices is a matter of great relief for India, which imports more than 85% of its oil requirement. Here, amidst the falling prices of crude oil, government oil companies in India have increased the prices of petrol and diesel by about Rs 7.50 in the last 10 days. Of course, it is natural to think that the prices of petrol and diesel in the country will come down in the coming time, whereas in reality it is not so.

Why will the price of petrol and diesel increase?

According to the report of financial experts and Kotak Securities, the calculations of oil companies are still not correct amidst the rising prices of petrol and diesel in the country. The Iran-America war, which started on February 28, has brought down the prices of crude oil from $70 per barrel to $114 per barrel. Meanwhile, oil companies did not increase prices for 76 days and bore the burden of expensive imports.

Livemint’s financial experts say that since the start of the war in both the countries, there has been a huge jump of 39% in the cost of crude oil, whereas in comparison, the prices of petrol and diesel have been increased only by 3-7%. In such a situation, companies may have to theoretically increase prices by Rs 11-14 per liter to recover their entire losses.

This is also a reason for increasing prices

Another reason for the increase in the prices of petrol and diesel is that even though the prices of crude oil have fallen to the level of $ 98 per barrel today, the tension on Hormuz is still not completely over. Even if peace talks between America and Iran are successful, it will take time for the situation to become normal.

On top of this, due to this geopolitical crisis, the marine insurance premium and freight charges of oil tankers coming from America and Northern Europe have increased significantly. This will ultimately be compensated by increasing retail prices.

losses are still being incurred

Even after increasing the prices of petrol and diesel 4 times, oil companies are incurring a loss of Rs 10 per liter on petrol and Rs 13 per liter on diesel. Companies cannot bear the loss of such a huge amount on a daily basis for a long time, hence there is no other option left but to increase the prices to maintain financial stability.

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Stock Market Bloodbath: Today on May 18, heavy selling was seen in the Indian stock market. Due to this earthquake in the market, about Rs 7 lakh crore of investors were completely wiped out. Recently, after the drone attack on UAE’s nuclear plant, crude oil prices were on such fire that BSE Sensex fell by more than 1,000 points to below 74,300, while Nifty 50 lost more than 300 and went below 23,350. This led to a huge decline in the wealth of investors.

Investors lost around Rs 7 lakh crore

Due to this decline, about Rs 7 lakh crore was wiped off from the market capitalization of BSE listed companies, due to which this figure fell to about Rs 454 lakh crore. This selling was not limited to just big stocks, rather both Nifty Midcap 100 and Nifty Smallcap 100 fell by more than 1 percent. The volatility in the market increased so rapidly that India VIX jumped by more than 5 percent and reached near 19.78, which is a sign of increasing nervousness among traders and investors.

Why is there chaos in the stock market?

The Parmamu Power Plant in Abu Dhabi, United Arab Emirates was attacked by a drone on Sunday. Due to this, the atmosphere of tension in the Gulf countries has deepened. Even though UAE has not held anyone responsible for this attack, it has called it a dangerous provocation.

On top of this, US President Donald Trump’s new warning to Iran that ‘the clock is ticking’ has created fear at the global level that the war between the two countries may now take a more severe form.

amidst all this Crude oil prices increased once again. Brent crude futures were up nearly 2 percent to trade around $111 a barrel, while WTI crude rose more than 2 percent to above $108 a barrel in Monday morning deals, renewing concerns about imported inflation. Due to this, foreign institutional investors (FIIs) are busy withdrawing their investments from Indian markets. These factors have a major contribution in the decline in the market today.

Rise in US bond yields

Today there was also a rise in bond yields, which increased concerns about inflation and fiscal pressures. The yield rate on 10-year treasury bonds increased to 4.632 percent, which is its highest level since February 2025. The yield on the 30-year Treasury bond rose to 5.156 percent, while the yield on the 2-year bond, which is closely watched for signals from the Federal Reserve, reached 4.101 percent.

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After the attack on Iran by America and Israel, a sharp increase in the prices of crude oil has been seen. As the threat of war and supply disruption increases, the oil market begins to fluctuate. Oil and gas companies get direct benefit from this. But the question is, will this advantage last for a long time and will companies invest heavily in new projects?

When tension increases in any large area of ​​the world and there is a fear of stopping the oil supply, prices increase rapidly. This also happened during the Russia-Ukraine war. In the third quarter of 2022, ExxonMobil and Chevron together made a profit of more than $30 billion, because at that time the prices of oil and gas were high.

Rise in crude oil prices

In the recent situation, Brent crude oil went above $ 85 per barrel for some time. Natural gas prices in Europe also reached the highest level since 2023. The main reason for this is the almost closure of the Strait of Hormuz. About 20 percent of the world’s crude oil supply passes through this route. The pressure in the gas market has also increased due to Qatar stopping LNG production.

Experts say that if prices remain high for a long time, only then will companies decide to dig new oil wells or start big projects. Big projects involve huge investments and may take months or years to start. According to Dan Pickering, if Hormuz remains closed for a long time, the price of oil may go up to $ 100 per barrel, but this is not yet decided.

US Navy will protect oil tankers: Trump

US President Donald Trump has said that if needed, the US Navy will protect oil tankers and insurance assistance will also be provided to shipping. After this statement, the prices softened a bit. If America, China or other countries release their emergency oil reserves in the market, the prices may come down further. At present the market is considering this as a short term problem.

The US oil and gas industry will certainly benefit from higher prices, but they cannot immediately make up for the Middle East’s supply shortage. America’s Gulf Coast refiners are earning better profits than before as demand for petrol and diesel has increased. LNG exporters have also benefited.