Strait of Hormuz tensions to keep oil prices elevated, $100/bbl risk

Oil prices are likely to remain supported at elevated levels over the coming months due to ongoing disruption risks in the Strait of Hormuz, according to energy market analysts. The critical waterway, through which a significant portion of global crude exports pass, remains a focal point for geopolitical concerns that could trigger supply shocks.

Rabobank's latest analysis indicates Brent crude will trade within a wide band, with support established around $70-$75 per barrel at the lower end. The upper end of the trading range is pegged at $95-$100 per barrel, with risk of a breach higher given the volatile geopolitical environment surrounding the Hormuz region.

Analysts expect crude markets to remain sensitive to developments in the Middle East throughout the forecast period. Any escalation of tensions in or around the Strait of Hormuz could trigger rapid price movements, potentially pushing crude past the psychologically significant $100 per barrel threshold that markets have tested periodically in recent years.

For Indian energy consumers, the sustained price pressure could impact fuel costs and inflation metrics. Crude oil remains a key factor in India's import bill and domestic fuel pricing, making global price movements particularly relevant to the domestic economy. Market participants are advised to monitor geopolitical developments closely as they navigate the volatile crude oil environment.