Strait of Hormuz is a key artery for one-fifth of global oil supplies. REUTERS/Dado Ruvic/Illustration/File Photo(REUTERS)AI Quick ReadNew Delhi: After a sharp 15% fall, crude prices rebounded early Thursday following uncertainty over the opening of the Strait of Hormuz, a key artery for one-fifth of global oil supplies.
At 8.30 am, the June contract of Brent on the Intercontinental Exchange was trading at $96.80 per barrel, higher by 2.16% from its previous close. The May contract of the West Texas Intermediate on the NYMEX rose 2.85% to $97.10 a barrel.
Oil prices plunged in the previous session after the US, Israel and Iran agreed to a two-week ceasefire. Iran had agreed to the opening of the Strait of Hormuz during this period. However, Israel launched the most severe strike on Lebanon since the start of the war on 28 February, following which the Islamic Revolutionary Guard Corps (IRGC) of Iran warned of "regret-inducing response".
Strikes by Israel on Lebanon, which the former said is not part of the ceasefire talks, have led to concerns of a reignition of the conflict in the region. Iran, however, maintained that halting attacks on Lebanon is a condition for the ceasefire.
In a post on X after speaking with Pakistan Prime Minister Shehbaz Sharif, Iranian President Masoud Pezeshkian said "Iran has announced the general outline of its 10-article plan as the framework for halting the war, one of the central conditions of which is the establishment of a ceasefire in Lebanon. Ensuring security in the Persian Gulf is contingent upon the complete cessation of aggressions. Iran will resolutely respond to any aggression."
According to a BBC report, Iran's navy has warned that ships seeking to cross the Strait of Hormuz without permission "will be targeted and destroyed". Only a handful of ships have crossed the waterway since the deal was announced against around 130 vessels daily before the war, it added.
Given that India imports about 90% of its oil requirement, any surge in crude prices directly impacts its import bill and macroeconomic indicators.
As of 7 April, the Indian crude oil basket stood at $135.63 per barrel. The Indian basket of crude oil represents a derived basket comprising the sweet grade (Brent Dated) and the sour grade (Oman & Dubai average) crude imported by Indian refineries during each month.
Rituraj Baruah is a special correspondent covering energy, housing, urban affairs, heavy industries and small businesses at Mint. He has reported on diverse sectors over the last eight years including, commodities and stocks market, insolvency and real estate; with previous stints at Cogencis Information Services, Indo-Asian News Service (IANS) and Inc42.