Key facts
- India's average crude import price surpassed $100 per barrel, reaching its highest level since May.
- Goldman Sachs forecasts oil prices could reach $120 per barrel due to escalating Middle East shipping risks.
- Iran plans to establish a new shipping corridor through the Strait of Hormuz, requiring vessels to coordinate with Tehran.
- Brent crude traded near $100 per barrel as Middle East peace hopes diminished.
- Saudi Arabia's Jizan refinery was attacked.
- Iran issued threats of "economic warfare" and stated it fired a new missile at U.S. warships.
India's average crude import price has surged above $100 per barrel, reaching its highest level since May, as Middle East hostilities intensify and shipping risks increase. The Indian Basket of crude oil averaged $99.38 per barrel in September, a significant rise from previous months.
Goldman Sachs has warned that escalating shipping risks in the Middle East could push oil prices to $120 per barrel. This forecast comes as international crude prices have rallied amid increased tensions, including U.S. strikes on Iranian oil tankers and Iran's threats of severe retaliation and the establishment of a new exclusion zone in the Persian Gulf.
Freight rates on the key route from Saudi Arabia to India have seen a dramatic increase of over 400% since February 28. India's crude oil import bill has also risen substantially, with a 60% increase in the April-June quarter compared to the previous year.
Iran announced Monday it is preparing to sign an agreement with Oman to establish a new shipping corridor through the Strait of Hormuz under Iranian control. Vessels entering a new restricted maritime zone around the chokepoint will be required to coordinate with Tehran. Traffic through Hormuz has fallen to its lowest level since May.
Brent crude traded near $100 per barrel as hopes for peace in the Middle East diminished amid renewed threats between the United States and Iran. Iran issued a threat of "economic warfare" and stated it had fired a new, advanced missile at U.S. warships. Oil prices were also pushed higher by an attack on Saudi Arabia’s Jizan refinery. Analysts are forecasting the crisis extending into 2027, revising their oil price forecasts.