Trump's claims fail... Crude oil rises again due to Iran's counterattack, prices may reach $150!
Iran's strong retort to Trump's peace proposals has rattled the oil market. Crude oil prices have surged again, with fears of reaching $150 per barrel, raising the specter of inflation. However, the silver lining is that India has a "Plan B" ready amid this crisis, ensuring secure supplies within the country.
The ongoing tensions in the Strait of Hormuz have raised the pulse of the global economy. The global oil market currently appears to be caught in a deep vortex of uncertainty.
On Tuesday morning, the crude oil market rebounded again, and prices recorded a sharp jump. At the root of this is the ongoing tension between US President Donald Trump and Iran.
On Monday, when Trump announced that he had held "successful negotiations" with Iran, markets worldwide breathed a sigh of relief, and oil prices fell by 10%.
However, this relief lasted only a few hours. Iran openly refuted Trump's claims the very next day, sparking a resurgence in the market.
Iran's counterattack sends markets into a tizzy
Donald Trump claimed that a positive discussion had taken place with Iran and that any attacks had been postponed for at least five days. However, a strong response from Tehran changed the entire scenario.
The Iranian administration completely denied these claims and seriously accused the US of lying to manipulate the financial markets. Iran dismissed Trump's statements as mere
"worn-out psychological warfare." As a direct result of all this, Brent crude prices rose 1.1% to cross $101 per barrel, while WTI crude also jumped 1.8% to $89.71.
Will the price reach $150?
Market experts believe that this extreme price volatility will persist until the Strait of Hormuz is completely cleared and safe for trade.
Meanwhile, the renowned financial institution Macquarie has made a prediction that has raised concerns among governments around the world.
Macquarie estimates that if the Strait of Hormuz is not resolved soon, crude oil prices could rebound from their floor of $85-90 to the $110-120 range.
Most alarmingly, if the Strait remains effectively closed until the end of April, Brent crude could even touch $150 per barrel. This would increase freight costs and trigger a new round of inflation.
India has a 'Plan B' ready
Amid this global chaos, India appears to be charting a path to success through its excellent diplomacy and prudence.
While Western nations are alarmed by this crisis, some crucial trade and diplomatic routes for India are not only open but also proving effective. Just on Monday, two Indian LPG tankers managed to safely transit the Strait of Hormuz.
Furthermore, after the US temporarily lifted sanctions on Iranian and Russian oil at sea, international traders have agreed to supply Iranian crude to Indian refineries at a premium.
This means that India has a robust "Plan B" ready to meet its energy needs without disruption.
International Energy Agency (IEA) chief Fatih Birol has also indicated that if the situation worsens, additional "strategic reserves" could be released into the market in collaboration with Asian and European governments.