Since the Strait of Hormuz, which is just 21 miles wide at its narrowest point, handles nearly a fifth of global oil trade, has caused concerns about a possible disruption in supplies, sending oil prices to two-month highs over the last week. Brent crude surged ~7 percent to ~USD 74.2/bbl on June 13, with intraday spikes to ~USD 78.5 — largest intraday moves since early 2022. On Monday, prices have been oscillating around USD 74–75/bbl, showing both spikes and pull-backs.
According to think tank GTRI, any closure or military disruption in the Strait of Hormuz would sharply increase oil prices, shipping costs, and insurance premiums, triggering inflation, pressuring the rupee, and complicating India’s fiscal management. A report by JM Financial said that if Iran’s crude oil supply gets disrupted by 0.5 to 1 mbpd (million barrels per day), it could lead to global crude oil prices surging by 5 to 10 dollars per barrel in the medium term.