Brent crude price crosses $114 as Middle East strikes test energy markets

Brent crude oil traded past $114 a barrel on Friday, reaching its highest level in five months as drone and missile strikes against energy infrastructure in Saudi Arabia renewed fears of supply interruptions across the Persian Gulf.

Brent crude futures rose 50 cents, or 0.45%, to $114.02 a barrel, putting the global benchmark on track for a third consecutive weekly advance. US West Texas Intermediate crude also pushed through the psychological barrier of $100 a barrel, gaining 40 cents to trade at $100.40.

What triggered the crude price surge

The rally gained momentum after Iran-backed Houthi militants carried out strikes targeting Saudi facilities, including the Red Sea port of Yanbu, an oil field, and an airport. In response to regional security threats near Bahrain, state energy giant Saudi Aramco ordered an evacuation of its corporate headquarters in Dhahran.

Broader geopolitical friction has kept energy traders on edge. Washington and Israel have explored contingency plans for retaliatory operations against Iranian targets following the upcoming US midterm elections, according to US officials. Meanwhile, shipping risks near the Bab el-Mandeb strait and the Strait of Hormuz continue to add a substantial war-risk premium to physical cargoes.

Investment banks have quickly revised short-term projections. Goldman Sachs noted that continued escalation against maritime corridors could propel crude toward $120 a barrel, though prices could ease back to around $80 if normal shipping patterns resume.

Impact on Indian oil marketing companies

The spike in raw crude prices spilled into Dalal Street during morning trade, prompting short-term sentimental selling in public-sector oil marketing companies. Shares of Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation fell between 1.5% and 2.5% in early dealings before stabilising.

BPCL opened at ₹286 on the National Stock Exchange before touching an intraday low of ₹281.80. Market analysts noted that the pullback reflected initial pricing of higher import bills and currency movements rather than structural weakness.

"The dip in OMC shares comes down to three immediate factors: soaring global crude, petroleum pump prices staying steady, and slight pressure on the rupee," said Avinash Gorakshkar, founder of Avinash Mentor Research. He advised investors against emotional exits, pointing out that domestic oil refiners are fundamentally well positioned to weather temporary geopolitical spikes.

Why domestic fuel supplies remain stable

Despite the run-up on international exchanges, domestic supplies across India remain steady. India has built substantial resilience into its energy architecture over recent years by diversifying import origins, securing term contracts across multiple continents, and maintaining comfortable operational inventories.

By keeping domestic retail fuel prices steady during international price flare-ups, policymakers have successfully insulated consumers and logistics networks from imported inflationary pressures. With diplomatic channels active and alternative supply routes operational, domestic refiners possess sufficient balance-sheet strength to navigate overseas market swings until Middle Eastern tensions subside.