Oil prices cross $83 per barrel as Middle East tensions escalate

March 5, 2026

New Delhi: Amid escalating Middle East tensions, crude oil prices went up more than 2 per cent on Thursday over supply constraints as Strait of Hormuz was closed by Iran.

Global Benchmark Crude Sees Sharp Rise

In the early morning trade, the April contract of the benchmark crude on the Intercontinental Exchange was trading at $83.26 per barrel, up by almost 2.43 per cent from its previous close.

The April contract of West Texas Intermediate on the New York Mercantile Exchange went up 2.63 per cent to $76.63 per barrel.

According to reports, a container ship transiting the Strait of Hormuz was struck by a projectile, damaging the vessel.

Potential Impact on India’s Import Bill

A continuous increase in oil prices would impact India’s import bill. An increase of $1 per barrel of oil for an entire year increases import bill by around Rs 16,000 crore.

Meanwhile, India is in a reasonably comfortable position as far as crude oil, LPG and LNG are concerned, with a stock of 25 days of reserve for crude and 25 days of products including the quantity that is in transit on ships headed for the country’s ports, according to government sources.

Diversification of Oil Sources

India imports over 85 per cent of its crude oil requirement, of which around 50 per cent is supplied by Middle Eastern countries through the Strait of Hormuz, flows from which have been disrupted following the Iran war.

However, India has diversified its oil sources by increasing imports from Africa, Russia as well as the United States and building resilience through strategic reserves.

India has strengthened its energy security by diversifying its oil imports to countries outside the Gulf in the past few years and a large volume of supplies do not come through the Strait of Hormuz now.

The country spent $137 billion on crude oil imports in the financial year ended March 31, 2025. During April 2025 to January 2026 — the first ten months of the current financial year — as much as $100.4 billion was spent on the import of 206.3 million tonnes of crude oil.