Why Brent crude could hit $120 amid Iran war? What it means for India as analysts warn oil prices to remain volatile

Brent crude prices reflect both available oil and the risk of losing future supplies. If tensions involving Iran worsen, traders may fear attacks on energy facilities, commercial ships or export routes. That fear can lift prices even before barrels actually disappear from the market.

The Strait of Hormuz is central to this risk. Any disruption there could restrict shipments through one of the world's most important oil transit routes. The article also cites vessel attacks, Houthi threats, limited alternative-route capacity and delayed Chinese crude arrivals as supply concerns. Recent US inventory declines add further upward pressure.

Analyst Ajit Mishra described the outlook as cautiously bullish and said Brent could move toward $115–120 if geopolitical risks escalate. Measures such as strategic-stockpile releases have not produced a sustained price decline. Markets are therefore watching negotiations, attacks and actual supply disruptions more closely than reassuring headlines.

The Strait of Hormuz is a strategic waterway through which major oil shipments move. Its importance comes from its role as a route connecting oil-producing areas with international buyers. When access is uncertain, markets worry that supplies may arrive late or not arrive at all.

The article describes the strait as one of the world's most important oil transit routes. Iran has proposed reopening it within seven days, but negotiations with the United States have stalled. Iran's security chief said Washington had not addressed all seven conditions for reopening the waterway. This leaves markets balancing possible diplomacy against further disruption.

A secure reopening would reduce immediate fears about shipping and supply shortages. Continued closure or renewed attacks could do the opposite. The result could be tighter physical availability, higher crude prices and greater pressure on countries that import large volumes of oil, including India.

The article does not provide a percentage for the strait's normal oil flows. Established international energy estimates commonly put Hormuz traffic at about 20–21 million barrels per day, or roughly one-fifth of global petroleum consumption. This makes the waterway unusually important to the world oil system.

The comparison matters because global consumption is roughly 100 million barrels per day. Hormuz shipments therefore represent a very large share of daily demand, even though not every barrel consumed worldwide travels through the strait. Alternative routes exist, but the article notes limited capacity on some alternatives and vulnerable regional shipments.

A serious blockage would not necessarily remove all those barrels permanently. It could, however, delay deliveries and intensify competition for available supplies. That risk helps explain why stalled negotiations, reopening uncertainty and threats to shipping can support higher prices. The figures are widely used estimates, not figures stated in the supplied article.

Oil prices respond strongly to the possibility that future supplies may be interrupted. A threat to production, pipelines, ports or shipping can make buyers and traders worry that fewer barrels will reach the market. Prices may rise before a disruption becomes large, because the market is pricing in risk.

The article gives several examples. Vessel attacks, Houthi threats and limited alternative routes leave West Asian shipments vulnerable. It also warns that damage to energy facilities or commercial shipping could further tighten supplies. Recent declines in US inventories add another layer of concern, because available stocks are already falling.

Strategic-stockpile releases and other policy measures have offered temporary relief but have not caused a lasting decline. Analysts therefore expect prices to react more to real disruptions and geopolitical developments than headlines alone. If attacks expand or the Strait of Hormuz remains closed, crude could rise further, with Brent potentially reaching $115–120.

India imports large quantities of crude oil, so international prices directly affect how much the country spends on energy. When each barrel costs more, importers must pay more for broadly similar volumes. That increases the total import bill and can put pressure on the country's external finances.

The cost can also travel through the fuel system. Refiners buy crude and turn it into products used by motorists, businesses, airlines and transport operators. If higher crude costs pass through, petrol, diesel and other fuels may become more expensive. Companies may then face higher delivery, manufacturing and operating costs.

The article warns that a sustained price rise could increase India's energy-import costs and pressure domestic fuel prices and inflation. An isolated price spike may be temporary, but prolonged disruption through West Asia or around Hormuz would create a larger burden. The effect would depend on prices, supply duration and how much costs are passed to consumers.

A disruption through Hormuz hurts less if buyers can draw on stored oil, reroute cargoes or obtain more production elsewhere. Strategic stockpiles can provide emergency barrels. Alternative shipping routes can keep some exports moving, while higher output can gradually replace lost supply.

The article mentions G7 strategic-stockpile releases, a US-Russia diesel arrangement and plans to ease sanctions on Moscow's shadow fleet. It also refers to alternative routes and projections that supplies could recover with higher production and secure export routes. These measures aim to improve availability or keep shipments moving despite geopolitical stress.

Their protection is limited. The article says stockpile releases and other steps have not caused a sustained price decline. Logistical bottlenecks, limited capacity on alternative routes and uneven supply recovery remain obstacles. The IEA and US Energy Information Administration project broader supply recovery only in 2027, subject to higher production and secure export routes.

Crude oil is a naturally occurring liquid mixture of hydrocarbons obtained from underground reservoirs or beneath the seabed. It is called crude because it has not yet been cleaned or separated into useful products. Its composition varies, so different crude oils produce different amounts of fuels and other materials.

At a refinery, crude is heated and separated into fractions according to boiling point. Lighter fractions can become petrol and other gasoline components. Middle fractions are processed into diesel and jet fuel. Heavier material may be further converted into additional fuels, lubricants, asphalt or other products. Refining also removes unwanted substances and improves fuel quality.

The supplied article focuses on crude prices and diesel availability, not on refining steps. This explanation uses established general knowledge. It matters here because crude is the main input for transport fuels. A supply disruption can therefore affect both the price of crude and the availability or cost of refined products such as diesel.