New Delhi: Crude oil prices surged on Wednesday after US President Donald Trump declared that the ceasefire with Iran was over and American forces struck Iranian targets overnight, reversing weeks of decline and reviving concerns over the cost of India's oil imports. Brent crude, the international benchmark, rose as much as 7.4 percent to USD 79.65 a barrel, while West Texas Intermediate (WTI) climbed about 7 percent to USD 75.38.
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The move was US crude's largest one-day jump since the start of June, unwinding a slide that had carried crude oil prices back towards pre-war levels.
The rally built in stages. Brent had been up about 3 percent in early trade, standing at USD 76.48 a barrel as of 06:30 GMT, its highest since June 23, before accelerating after Trump's comments. Brent had been rising by about 2.5 percent shortly before the president's remarks, then spiked further as he ruled out further dealings with Tehran.
Trump called off the ceasefire during a press conference with NATO chief Mark Rutte at the alliance's summit in Ankara, Turkey. "To me, I think it's over," Trump told reporters, adding that he no longer wished to deal with Iran. He said negotiations could continue but that he considered them a waste of time, and warned that American forces would likely strike Iran again.
The flare-up followed a fresh round of attacks on shipping in the Strait of Hormuz, the chokepoint through which roughly a fifth of the world's traded oil and LNG passes in peacetime. The US bombed Iran overnight in retaliation for attacks on three tankers that crossed the strait this week, after the US-led Joint Maritime Information Center raised its threat assessment for the waterway to "severe."
Separately, the US Treasury late on Tuesday revoked its 60-day waiver on sanctions on Iranian oil, barring transactions after July 17 and rescinding authorisation for new purchases or loadings after Tuesday. Trump also floated reimposing the US naval blockade on Iranian vessels and said the military may take over Kharg Island, an export hub for Iranian crude.
The reversal was abrupt: jitters had returned to oil markets only a day earlier, after weeks in which prices had eased on ceasefire optimism. Brent had touched a 52-week high of USD 120.88 on April 30 before retreating through June.
Against this backdrop, Maulik Patel, Head of Research at Equirus Securities, said sustained higher crude carried negative near-term implications for India's macro picture, as it could widen the oil import bill, pressure the current account deficit, add to inflation and keep the rupee under strain.
However, Patel flagged that India's growth had become structurally far less energy-intensive. He noted the country needed about 0.65 million tonnes of oil equivalent (mmtoe) to generate every billion dollars of GDP in 1998, a figure that had fallen to about 0.24 by 2024 — a reduction of more than 60 percent over 26 years — driven by a cleaner electricity grid, a deepening services mix and steady efficiency gains in transport and appliances.
Patel also pointed to a disconnect between crude and the currency. Even when oil corrected before the latest escalation, the rupee did not appreciate, he said, because it was being driven less by oil and more by other forces, including foreign portfolio investors pulling over USD 17-18 billion from Indian equities in 2026 and a globally strong US dollar. He cited a mechanical lag as well: crude relief takes time to feed into rupee strength, while capital-flow and dollar dynamics hit immediately.
On the sectoral impact, Patel said upstream producers ONGC and Oil India stood to gain from higher crude realisations, provided there was no windfall-tax overhang. Export-oriented refiners would benefit if product cracks held, with gasoil and gasoline spreads elevated at about USD 45/bbl and USD 23/bbl, respectively.
He described oil marketing companies (OMCs) as a "swing factor," hurt only if retail fuel prices were cut, with earlier price hikes otherwise largely insulating marketing margins at USD 75-80/bbl of Brent. City gas distribution companies (CGDs) were under pressure from high spot LNG and a weaker rupee and risked de-rating absent further fuel-price hikes. Crude-linked consumers — aviation, paints, chemicals, tyres, cement, logistics and LNG-exposed industrial users — all faced input-cost pressure, he said.
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Patel added that from an energy-security standpoint, power utilities, the renewable energy value chain and transmission and distribution capital goods firms could benefit from a possible rise in investment as India works to strengthen long-term energy security and diversify its energy mix.
