Oil hits five-month high after U.S. attacks key Iranian nuclear sites
Market participants expect further price gains amid mounting fears that an Iranian retaliation may include a closure of the Strait of Hormuz, through which roughly a fifth of global crude supply flows
Oil prices jumped on Monday (June 23, 2025) to their highest since January as the United States' weekend move to join Israel in attacking Iran's nuclear facilities stoked supply worries.
Brent crude futures was up $1.92 or 2.49% at $78.93 a barrel as of 0117 GMT. U.S. West Texas Intermediate crude advanced $1.89 or 2.56% to $75.73.
Both contracts jumped by more than 3% earlier in the session to $81.40 and $78.40, respectively, touching five-month highs before giving up some gains.
The rise in prices came after U.S. President Donald Trump said he had "obliterated" Iran's main nuclear sites in strikes over the weekend, joining an Israeli assault in an escalation of conflict in the Middle East as Tehran vowed to defend itself.
Iran is OPEC's third-largest crude producer.
Market participants expect further price gains amid mounting fears that an Iranian retaliation may include a closure of the Strait of Hormuz, through which roughly a fifth of global crude supply flows.
Iran's Press TV reported that the Iranian parliament had approved a measure to close the strait. Iran has in the past threatened to close the strait but has never followed through on the move.
"The risks of damage to oil infrastructure ... have multiplied," said Sparta Commodities senior analyst June Goh.
Although there are alternative pipeline routes out of the region, there will still be crude volume that cannot be fully exported out if the Strait of Hormuz becomes inaccessible. Shippers will increasingly stay out of the region, she added.
Goldman Sachs said in a Sunday (June 22, 2025) report that Brent could briefly peak at $110 per barrel if oil flows through the critical waterway were halved for a month, and remain down by 10% for the following 11 months.
The bank still assumed no significant disruption to oil and natural gas supply, adding global incentives to try to prevent a sustained and very large disruption.
Brent has risen 13% since the conflict began on June 13, while WTI has gained around 10%.
The current geopolitical risk premium is unlikely to last without tangible supply disruption, analysts said.
Meanwhile, the unwinding of some long positions accumulated following a recent price rally could cap an upside to oil prices, Ole Hansen, head of commodity strategy at Saxo Bank, wrote in a market commentary on Sunday.
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Mint
35 minutes ago
- Mint
Israel-Iran conflict threatens India's agri exports
NEW DELHI : The escalating conflict between Israel and Iran is clouding the outlook for India's agricultural exports, with experts warning of potential disruptions to trade routes, payments, and shipments, particularly via Iran's Bandar Abbas port, a key gateway for India to Afghanistan and Central Asia. Exporters are also calling for urgent action to scale up the Chabahar Port as a strategic alternative to safeguard India's regional trade links. 'Payment mechanisms—already constrained by US curbs—may tighten further, and heightened security risks in the Gulf could push up insurance premiums and delay shipments," said Ajay Srivastava, a former trade services official and co-founder of the economic think tank Global Trade Research Initiative (GTRI). Also Read: Mint Primer: Oil shock looms as Iran threatens to shut Strait of Hormuz. What it means for India 'Perishable goods like rice, bananas, and tea are particularly at risk," he added. India's exports to Iran stood at $1.24 billion in 2024-25, with basmati rice alone accounting for $753.2 million. Other major exports include bananas ($53.2 million), soybean meal ($70.6 million), bengal gram ($27.9 million), and tea ($25.5 million). However, the risk of a prolonged conflict could choke this trade pipeline. Hit on exports To be sure, Basmati rice exports have already taken a hit. Nearly 100,000 tonnes of basmati shipments bound for Iran are stranded at Indian ports, as exporters have put deliveries on hold amid growing uncertainty. Iran imports nearly one million tonnes of basmati rice from India annually, accounting for about 20% of India's total basmati exports, said Sushil Kumar Jain, vice president, All India Rice Exporters Association. Jain said payment dues of ₹1,500 crore to Indian exporters are stuck amid the ongoing conflict. 'If the conflict persists for a longer period, the exporters may face huge losses, which is difficult to quantify at the moment, but if it settles down in a few days, then we don't see major losses," he added. The conflict's ripple effects are also being felt in the sugar trade. While direct sugar exports to Iran are limited, India routes shipments to Afghanistan through Bandar Abbas due to its fraught trade relations with Pakistan. 'Operations at the port are currently stable, but any escalation could disrupt sugar movement to Afghanistan," said Deepak Ballani, director general, Indian Sugar and Bio-energy Manufacturers Association (ISMA). Also Read: US attack on Iranian nuclear sites roils oil market, India braces for possible price surge Other commodity markets are also on edge. For instance, edible oil prices have jumped $40-50 in just a week, due to supply chain strains and energy cost concerns, according to the Solvent Extractors' Association of India (SEA). Alternative route Meanwhile, rising tensions have prompted experts to underline the growing strategic urgency of scaling up the Chabahar port as India's alternative trade gateway to Afghanistan, Central Asia, and Eurasia. Bandar Abbas, Iran's largest commercial port located on the Strait of Hormuz, is of significant strategic and economic value not just for Iran but also for regional players like India. For India, the port has long served as a key transit point for exporting goods, particularly to landlocked Afghanistan and Central Asia, bypassing Pakistan. The rising tensions may threaten operations in Bandar Abbas, so the Chabahar port is no longer just an option, as it is becoming a strategic imperative for India to connect to Afghanistan, Central Asia, and Eurasia, said Ajay Sahai, director general and CEO of the Federation of Indian Export Organisations (FIEO). 'Rising Israel-Iran tensions reinforce the urgency to operationalize, scale, and integrate Chabahar into India's core trade corridors, which is time and cost-effective," Sahai said. 'India now has an opportunity to shape the future of regional connectivity. Chabahar could emerge not just as a port, but as India's diplomatic and logistical gateway to West and Central Asia," he added. The news agency Press Trust of India on Sunday reported that Indian exporters urged the Centre to shift cargo operations from the Bandar Abbas port to the Chabahar port at a high-level meeting chaired by commerce secretary Sunil Barthwal. Also Read: Mint Explainer | Strait of Hormuz: Will Iran shut the vital oil artery of the world? The meeting brought together senior officials from the ministries of commerce, petroleum, shipping, revenue, and financial services, along with representatives from shipping lines and airport authorities, highlighting the urgency of safeguarding strategic trade corridors, the news agency reported. The spokesperson of the ministry of agriculture and farmers' welfare and the ministry of commerce and industry didn't respond to emailed queries. Challenges ahead However, an immediate diversion of cargo may not be practical due to infrastructure constraints, experts warned. An immediate diversion is not feasible, as the existing infrastructure at Chabahar is inadequate to handle a sudden spike in cargo and container volumes, said Anil Devli, CEO of the Indian National Shipowners' Association (INSA). 'Even roads connecting the port to the nearest highway are not proper, which would make the onward journey both difficult and expensive," Devli said. Despite recent improvements, Chabahar's handling capacity remains modest. The port managed about 80,000 TEUs and three million metric tonnes (MT) of bulk cargo in 2024-25—up from 64,000 TEUs and 2.12 MT in 2023-24, and just 9,000 TEUs and 2.08 MT in 2022-23, according to the data from the ministry of shipping.
The Hindu
an hour ago
- The Hindu
Rice exporters stare at major disruptions, payment delays amid escalating Iran-Israel conflict
With the escalation of Iran-Israel conflict, rice exporters in Haryana -- which accounts for 30% of the country's basmati rice shipments to Iran -- are struggling with major disruptions in ship movements and payment delays. While Karnal is the main hub of basmati exports, Kaithal and Sonipat too contribute to the foreign demand. "The ongoing Iran-Israel conflict has impacted the trade," said Sushil Jain, Rice Exporters Association's state unit president. "Nearly 10 lakh metric tonnes of Basmati rice is exported from the country to Iran, of which Haryana's share is about 30-35%," he said, adding that shipments of about 1 lakh metric tonnes of basmati rice for Iran are stuck at ports. Besides, the payments amounting to ₹1,500 crore to ₹2,000 crore for nearly 2 lakh MT of the rice exported to Iran by Indian exporters has also got stuck due to the conflict, Jain said. The escalation in the conflict is going to impact the Indian market which is already witnessing some fall in the prices, he said. "Another issue which the exporters are facing is the lack of insurance cover for the vessels during war which increases the risk for us," he added. Iran is India's second-largest basmati rice market after Saudi Arabia. India exported around 1 million tonnes of the aromatic grain to Iran during the 2024-25 fiscal year. India exported approximately 6 million tonnes of basmati rice during 2024-25, with demand primarily driven by the Middle East and West Asian markets. Other major buyers include Iraq, the United Arab Emirates and the United States. The Israel-Iran conflict has escalated significantly in recent weeks, with both sides exchanging heavy strikes and the U.S. becoming directly involved in the hostilities. The shipping disruption adds to challenges facing Indian rice exporters, who have previously dealt with payment delays and currency issues in the Iranian market due to international sanctions. On Sunday (June 22, 2025), Prime Minister Narendra Modi conveyed to Iranian President Masoud Pezeshkian India's "deep concern" over Iran's conflict with Israel and called for immediate de-escalation of the situation through "dialogue and diplomacy". The phone conversation initiated by Pezeshkian came hours after the US bombed three major nuclear sites -- Fordow, Natanz and Isfahan -- in Iran.
Hindustan Times
an hour ago
- Hindustan Times
Oil supply via Strait of Hormuz unlikely to be hit despite Iran-Israel war
Amid the ongoing conflict in the Middle East and rising crude oil prices, energy experts have said that oil supply through the Strait of Hormuz is unlikely to be immediately affected, though risks remain if tensions escalate further. India and global markets remain watchful, hoping that the vital Strait of Hormuz stays open.(AFP) Industry experts, in conversations with ANI, stated that the situation in the region remains tense after the recent US action against Iran, but the general hope is that oil supply routes will stay open. MK Surana, former chairman of Hindustan Petroleum Corporation Limited (HPCL), told ANI, "India has done well to diversify its supply sources in the last few years, and our dependency on Straits of Hormuz and supply from the Middle East is lesser now than what it was earlier. But any disruption in the Straits and Middle East supply will definitely affect crude oil prices globally. Therefore, for India, pricing is a bigger concern than the availability." Surana added that immediately, there is unlikely to be any disruption in supply through the Strait of Hormuz. "Post US action on Sunday in Iran, the situation is of an uneasy calm awaiting Iranian response. General understanding and hope is that the supply chain through the Straits of Hormuz will not get blocked in reality and Iran will not precipitate actions that will damage any oil infrastructure in the neighbouring countries," he said. However, "Despite a looming threat, till these two situations hold, the crude oil prices are unlikely to go above the USD 80 range, though there may be occasional spikes depending on news flow. But if any of the two situations happens in reality, the crude prices will rise sharply," noted the ex-HPCL Chairman. Surana explained that fundamentally, based on supply-demand projections and without the current geopolitical tensions, crude oil prices would be in the range of USD 60 to 65 per barrel. Prominent energy expert Narendra Taneja echoed similar views. He told ANI, "The Strait of Hormuz has never ever been closed or blocked in history. It will be a major escalation if there is any attempt on the part of Iran to close the Strait. The US would most likely respond militarily and not let Iran block it. Major oil exporters Saudi Arabia, Kuwait, and Iraq would also protest. Big importers like China and India would protest." On the impact on India, Taneja stated, "Almost 39 per cent of our oil import tankers pass through the Strait of Hormuz. So, the impact on India would be there, but our biggest worry is the price, not the supply or availability. If Iran is allowed to succeed in blocking the Strait, oil prices may go up to USD 150 per barrel." Madan Sabnavis, Chief Economist of Bank of Baroda, said, "A 10 per cent increase may not have much of an impact on the economy where the fundamentals are robust. But if it is over USD 100 for a prolonged period of time, it would mean virtually a 25 per cent increase over the base case assumption and can have a major impact on these variables." He added that the impact on GDP will depend mainly on how inflation behaves and how it affects consumption. Ajay Srivastava of Global Trade and Research Initiative (GTRI) highlighted India's vulnerability, stating, "India is especially vulnerable to a possible Strait of Hormuz closure. Nearly two-thirds of its crude oil and half of its LNG imports transit this route. Any closure could send oil prices soaring, sharply inflating India's import bill, worsening inflation, and putting pressure on the country's fiscal position." "The Strait, which carries nearly 25 per cent of global oil shipments and significant LNG volumes, remains open for now. The parliamentary vote is not binding; a final decision rests with Iran's Supreme National Security Council, which is still deliberating. While no closure has been enacted yet, the risk of disruption looms amid escalating U.S.-Iran tensions," he noted further. Meanwhile, Union Petroleum Minister Hardeep Singh Puri, while speaking with ANI, assured that India is prepared for such risks. He said, "We had diversified the sources of supply. Out of the 5.5 million barrels of crude oil that India consumes daily, about 1.5 to 2 million come through the Straits of Hormuz. We import roughly 4 million barrels through other routes." Puri added, "Our oil marketing companies have enough stocks. Most of them have stocks up to three weeks. One of them has 25 days' stock. We can increase the supply of crude through other routes. We are in touch with all possible actors." As tensions in the Middle East continue, India and global markets remain watchful, hoping that the vital Strait of Hormuz stays open and uninterrupted to avoid a sharp rise in crude oil prices.
