Oil prices jumped sharply as US continued its attacks on Iran for the 6th consecutive night.
Crude oil benchmark index, Brent crude futures rose more than 2 % to surging the per barrel cost above $85, meanwhile, U.S. West Texas Intermediate futures gained 2.6% to trade at $80.99, erasing losses from the previous session.
Both benchmark contracts have climbed nearly 12 percent this week, with Brent on track for a third consecutive weekly gain, and WTI for a second weekly gain.
The escalating fighting comes as the fragile truce reached last month has collapsed, once again disrupting energy flows through the strategically vital Strait of Hormuz, which typically handles around 20% of the world’s oil traffic. As of today in response to infrastructure damage, Iran signalled that the Houthis could be pushed to threaten Bab al-Mandeb if the US continued its attacks. According to analysts, dual closure of Bab al mandeb and Hormuz would trigger an economic catastrophe.
India which began importing oil from Russia following tensions in the Middle East, expects to surpass five million barrels per day in July while maintaining the import level in June, when crude oil barrels from Russia accounted for half of the country’s crude imports.
While prior to the West Asia crisis, almost 50% of India’s crude oil imports came from West Asia via the Strait of Hormuz, after the crisis started in February end, West Asia’s share dropped to 30%, resulting in more imports of Russian crude. Mostly due to the high imports of Russian crude, India’s overall crude import volumes rose to 8% month-on-month during May.