Global crude markets surged on Friday as geopolitical tensions in the Middle East intensified, pushing Brent crude above the psychologically important $100 per barrel level. The rally came after it became clear that an Indian-flagged tanker believed to have crossed the Strait of Hormuz had instead departed from Oman east of the strait, underscoring that the strategic maritime chokepoint remains effectively closed amid the ongoing U.S.-Israeli conflict with Iran.

Brent crude futures for May delivery rose $1.37, or about 1.36 percent, to $101.83 per barrel in mid-session trading, while U.S. West Texas Intermediate crude for April gained 53 cents to trade near $96.26 per barrel. Both benchmarks were on track for weekly gains after surging more than 9 percent in the previous session, their strongest move since August 2022.

The sharp price movement reflects growing anxiety about the security of global energy supplies. The Strait of Hormuz, which connects the Persian Gulf with the Gulf of Oman, is widely regarded as one of the world’s most critical oil transit routes. Roughly one-fifth of global petroleum consumption flows through this narrow passage each day, making any disruption a major concern for energy markets.

Confusion earlier in the day emerged after reports suggested an Indian tanker had navigated through the strait carrying gasoline destined for Africa. However, an Indian government official clarified that the vessel had actually sailed east of the strait from Oman rather than passing through the blocked waterway. The clarification reinforced market perceptions that shipping through Hormuz remains severely restricted.

The geopolitical risk premium increased further after Iranian forces reportedly targeted ships attempting to pass through the waterway. In addition, Iraqi security officials reported that two fuel tankers in Iraqi waters were struck by explosive-laden Iranian boats. Iraqi authorities subsequently confirmed that oil port operations had been halted, adding to fears that regional supply chains may face extended disruption. More details on the geopolitical developments can be found through publicly available updates from global energy agencies such as the International Energy Agency.

Energy analysts say the market’s reaction reflects deeper concerns about the durability of global oil supply infrastructure. Bjarne Schieldrop, chief commodities analyst at SEB, noted that the conflict’s duration is increasingly becoming a central concern for traders. According to him, the biggest risk now lies in potential damage to oil infrastructure across the Middle East, which could lead to long-term supply losses rather than short-term logistical disruptions.

In an attempt to stabilise markets, the United States issued a 30-day license allowing countries to purchase Russian oil and petroleum products currently stranded at sea. U.S. Treasury Secretary Scott Bessent said the move was intended to ease pressure on global energy markets that have been destabilised by the ongoing conflict.

Russia’s presidential envoy Kirill Dmitriev indicated that roughly 100 million barrels of Russian crude were affected by the policy change. While the license does not introduce new supply to the market, analysts believe it may reduce logistical friction and prevent further tightening of available inventories.

The United States has also moved to release crude from its Strategic Petroleum Reserve. The U.S. Energy Department announced a plan to release 172 million barrels of oil in coordination with the International Energy Agency. The IEA has pledged to release a combined 400 million barrels from global strategic stockpiles in what would represent one of the largest coordinated emergency responses in energy market history. The agency’s policy framework can be explored through its official documentation on emergency oil stock releases.

Despite these efforts, market relief proved short-lived. Analysts at IG noted that renewed escalation in the Middle East quickly offset the stabilising impact of the IEA’s coordinated release.

Iran’s new Supreme Leader, Ayatollah Mojtaba Khamenei, signaled that Tehran intends to continue using the Strait of Hormuz as leverage against the United States and Israel. Reports from regional sources also suggested that Iran may have deployed naval mines in the strait, complicating efforts to reopen the passage even if military tensions ease.

The possibility of naval escorts for commercial vessels is now being discussed. U.S. Treasury Secretary Bessent indicated that the U.S. Navy, potentially supported by an international coalition, could escort tankers through the strait once military conditions allow safe passage.

Major investment banks have begun adjusting their outlook for energy prices. Goldman Sachs projected that Brent crude could average above $100 per barrel in March before moderating toward $85 in April if supply disruptions ease. However, the bank warned that prices could remain highly volatile as long as geopolitical risks persist.

From an Indian perspective, sustained crude prices above $100 per barrel could have significant macroeconomic implications. India imports more than 80 percent of its crude oil requirements, meaning prolonged price spikes could widen the country’s trade deficit, exert pressure on the rupee, and complicate inflation management for policymakers.

Higher oil prices would particularly affect sectors such as aviation, paints, logistics, and chemicals, which rely heavily on petroleum-linked inputs. On the other hand, domestic upstream energy producers could benefit from improved realizations if elevated prices persist.