Crude Oil Prices Jump 2% After US President Urges for Tehran’s Evacuation Amid Rising Israel-Iran Tensions

Crude oil prices rose sharply after U.S. President Donald Trump made strong comments about the ongoing conflict between Israel and Iran. He called for the evacuation of Tehran, which raised concerns that the war could spread further. As a result, global oil prices surged by nearly 2%.

The current prices are:

• WTI Crude: US$71.99
• Brent Crude: US$73.45
• Murban Crude: US$73.37

These prices have gone up by around US$4–US$5 per barrel since the conflict escalated last week.

Impact of Rising Crude Oil Prices on Indian Oil Companies

Rising crude oil prices affect Indian oil companies differently. Let’s break it down.

• Oil Marketing Companies (OMCs), such as HPCL, BPCL, and IOC, usually face pressure when oil prices become expensive. These companies buy crude oil, refine it, and sell it as petrol and diesel. But they cannot always pass the full cost increase to consumers due to government rules or fear of losing customers. This reduces their profit margins.
• On the other hand, Oil Exploration Companies such as ONGC and Oil India benefit from higher prices. They produce oil, so when prices rise, they earn more per barrel. Their production costs remain mostly the same, so their profits can increase.

Will Inflation Rise After the Israel-Iran Conflict?

In May, retail inflation fell to 2.82%, the lowest in over six years. This drop was mainly because food prices became stable. However, higher crude oil prices can raise inflation. Economists say that a US$10 increase in oil prices can push inflation up by 0.4% to 0.6%. This has sparked concerns about inflation levels, especially since crude oil prices have risen by 15% since May.

What if Tensions Between Israel and Iran Escalate?

If Iran blocks the Strait of Hormuz, where 20% of global oil passes through, prices may jump further and even cross US$80 per barrel. This could worsen inflation and hurt Indian companies more.

Read more: ITR Filing 2025: Here’s Why You Must Declare F&O Losses

Conclusion

Escalating tensions between Israel and Iran are pushing oil prices up. While this may impact shares of India’s oil marketing firms today, exploration companies could gain. However, if prices rise further, there is a risk of inflation increasing, which will impact the overall economy.

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