Brent nears $110 a barrel as conflict in West Asia deepens, Hormuz talks postponed | Today’s news
New Delhi: Oil prices extended gains on Monday after talks between Iran and other West Asian countries on operations in the Strait of Hormuz were postponed, while attacks by Houthi militias on a Saudi airbase raised fears of further conflict in the Red Sea region.
Brent crude for November on the Intercontinental Exchange was at $109 a barrel around 6:40 p.m., up 4.20% from its previous close. The October West Texas Intermediate contract on the New York Mercantile Exchange rose 4.42% to $104.47 a barrel.
Al Jazeera reported that the Houthis have taken control of Yemen’s Red Sea coast and consolidated their control over the Bab al-Mandeb Strait, a key maritime junction in the region. The waterway carries about 12% of world trade, including 11% of maritime oil trade.
Yemen’s Houthis said they launched a large-scale ballistic missile and drone attack on Saudi Arabia’s King Khalid Air Base in Khamis Mushait, according to Al Jazeera. Last week, Houthi militias captured the Red Sea city of Mocha and expanded their influence over the strategic Bab al-Mandeb Strait.
According to Iranian media, talks in Oman between Iran and the Arab states of the Persian Gulf have been postponed at the request of some regional countries. The postponement followed an attack on an Iranian commercial cargo ship in the Strait of Hormuz that killed one person.
Escalating hostilities in West Asia raise the risk of supply disruptions, threaten to increase India’s crude oil import bill, and increase inflationary and fiscal pressures.
India, which imports about 90% of its crude oil, remains particularly exposed to sustained price increases. Bank of Baroda estimates show that a sustained $1 rise in oil prices can increase the country’s annual import bill by about ₹18,000 million crowns. India’s oil import bill of about $120 billion a year is about 17-25% of its total merchandise imports.
The pressure was building even before the last surge. India’s April-July crude oil import bill reached $63.37 billion, up 56% from a year earlier and already accounting for more than half of its total oil import expenditure in the previous financial year.
In August, India’s retail inflation rose to a 20-month high of 4.82%, driven by higher fuel and food prices, putting it above the central bank’s target of 4% for the third month since January 2025. Wholesale inflation also rose slightly to 9.92% in August from 9.78% on Monday, according to government data released on Monday.
S&P Global Energy said in a recent analysis that prospects for a definitive resolution to the Iran conflict had dimmed and oil markets were settling into a long-term new normal in which risks of disruption are persistent rather than episodic.
She added that oil production in West Asia is unlikely to return to pre-war levels by the end of 2027.
As a result, West Asian crude and condensate exports are now expected to average 10-16 million barrels per day per month through 2027, compared with around 20 million barrels per day before the war in January-February 2026. S&P Global Energy forecast oil prices to remain in the range of 80-02 barrels to $100 per $100. $90 or more for the rest of 2026 and $86 next year.
