Oil surges past $100 on Iran succession shock, India braces for economic ripples

With oil markets surging past the psychological USD 100 mark Monday, on news that Iran has chosen Mojtaba Khamenei to succeed his slain father as the West Asian nation’s Supreme Leader, a sure sign that the war between Teheran and Washington will last longer than bargained for, financial markets are bracing for more disruptions.

- JAYANTA ROY CHOWDHURY

Brent oil futures traded at USD 103 for deliveries in May as of morning American East Coast time. India’s own benchmark, the Indian basket of crude, a weighted average of Oman, Dubai and Brent grades, stood at roughly USD 931 per barrel on March 5 and will likely come nearer the USD 100 mark soon if the war continues.

“India’s dependence on imported energy leaves it particularly exposed to instability in the Gulf. The country consumes roughly 2.5 to 2.7 million barrels of crude oil per day from overseas suppliers, most of it transported through the Strait of Hormuz,” explained an Indian Oil official, after his company’s stock fell 7.48 per cent on Monday.

The disruptions in the Gulf chokepoint at the Straits of Hormuz, which have already raised war-risk insurance for tankers and delayed shipping, has meant import and export costs have gone up sharply, said exporters.