Why could Brent oil reach $120 in the middle of the Iran war? What this means for India as analysts warn that oil prices will remain volatile | Today’s news
Oil prices are likely to remain volatile in the coming week as stalled talks between the US and Iran, escalating tensions in West Asia and lingering supply risks keep global energy markets on edge, analysts quoted by news agency PTI said.
While measures to ease supply shortages could offer temporary relief, uncertainty over the reopening of the Strait of Hormuz and the threat of further attacks on energy infrastructure continue to support prices.
Monthly oil market reports from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) will also be in the spotlight.
Oil Prices: Brent Nears $110, WTI Gains Almost 9%
Oil futures rallied over the past week as concerns about supply disruptions and geopolitical tensions outweighed hopes for improved global availability.
On the Multi Commodity Exchange (MCX), oil futures for November delivery rose ₹566, or 6.4%, during the week at the end of the week ₹9,394 per barrel.
In international markets, Brent crude futures for December delivery rose $5.14, or nearly 5%, to settle at $109.86 a barrel, having touched $110 on Friday.
Ajit Mishra, senior vice president of research at Religare Broking, told PTI that the outlook remains cautiously bullish, with prices likely to react to geopolitical developments and actual supply disruptions rather than headlines alone.
Recent declines in US oil inventories have added to the upside pressure. Mishra said further escalation of geopolitical risks could push Brent crude to $115-120 per barrel.
The key supply risk remains the Strait of Hormuz
The Strait of Hormuz remains a major source of uncertainty for oil markets. Any disruption to supplies via the strategic waterway could further tighten global supplies and raise prices.
Iranian Foreign Minister Abbas Araqchi said Sunday that Tehran’s proposal to reopen the strait within seven days remained on the table, according to Iranian media reports.
Iran made the proposal in mid-September after a temporary ceasefire collapsed. Tehran later admitted that it had received a US response, but negotiations stalled. Iran’s security chief said last week that Washington had failed to meet all seven conditions for reopening the waterway.
The lack of progress has left markets weighing the possibility of a diplomatic breakthrough against the risk of further escalation and disruption of one of the world’s most important oil shipping routes.
Why oil prices remain firm despite measures to reduce supply
Navneet Damani, head of commodities research at Motilal Oswal Financial Services, told PTI that crude oil’s muted response to the bearish development suggests that physical supply constraints are increasingly outweighing optimism over policy measures.
The release of G7 strategic stockpiles, the US-Russia oil deal and plans to ease sanctions against Moscow’s shadow fleet have raised expectations of better availability. However, these measures failed to trigger a sustained decline in prices.
Logistical bottlenecks and an uneven supply recovery continue to constrain oil availability.
The rise in West Asian exports in September was largely driven by Saudi Arabia, while ship attacks, Houthi threats and limited capacity on alternative routes left regional shipments subject to further disruption.
Damani also cited stalled U.S.-Iran talks, delayed Chinese oil deliveries and an estimated draw of 8 million barrels in U.S. stockpiles as factors adding to supply concerns.
The IEA’s warning of prolonged tightness in diesel supplies added to worries about the availability of refined petroleum products. Both the IEA and the US Energy Information Administration do not expect a broader supply recovery until 2027, assuming higher production and secure export routes.
Tensions between the US and Iran and Houthi threats add to the uncertainty
The geopolitical outlook remains volatile amid concerns that the conflict in West Asia could widen further.
US President Donald Trump said Washington was considering joining Saudi strikes against Iran-backed Houthi rebels in neighboring Yemen after an attack on Riyadh’s international airport.
Any expansion of hostilities could increase the risk of attacks on commercial shipping and energy infrastructure, complicating efforts to restore stable oil flows.
Mishra said further escalation or damage to energy facilities in West Asia could raise oil prices by increasing the geopolitical risk premium.
Will Russian oil offer relief to India?
Trump’s executive order waiving key sanctions, restrictions and tariffs related to Russia and Iran offered temporary relief to major buyers of Russian oil, including India, amid rising energy prices.
However, the measures do not eliminate the risk of supply disruptions. Attacks on Russian energy infrastructure could still affect production and exports, leaving oil markets exposed to developments involving both Russia and West Asia.
For India, one of the world’s biggest oil importers, sustained price rises could raise the cost of energy imports and add pressure on domestic fuel prices and inflation.
Analysts said the direction of the market will largely depend on whether geopolitical tensions translate into real disruptions to production and supply.
