Global energy markets continue to surge as the war between the United States-Israel alliance and Iran entered its seventh day, raising fears of prolonged supply disruptions through the Strait of Hormuz, one of the world’s most critical oil shipping chokepoints.
Brent crude traded between $84.17 and $84.59 per barrel on March 6, slightly below the previous day’s peak of above $85 but still higher than the $83-$84 range seen a day earlier. US benchmark West Texas Intermediate (WTI) crude hovered near $79.5-$80 per barrel after surging nearly 20 per cent over the past week, marking its biggest weekly advance since 2022.
Analysts estimate the conflict has added a geopolitical risk premium of $5-$14 per barrel to global oil prices, reflecting concerns that shipments through the Strait of Hormuz, which carries roughly one-fifth of the world’s oil supply, could remain disrupted.
Amid fears of a tightening supply market, the United States on March 5 granted Indian refiners a 30-day waiver to continue purchasing Russian oil.
The decision comes just weeks after US President Donald Trump said India had agreed to reduce purchases of Russian crude in an effort to cut Moscow’s revenues during the war in Ukraine. US Treasury Secretary Scott Bessent said the temporary waiver was designed “to enable oil to keep flowing” in global markets and would not provide significant financial benefits to Russia.
The move could ease supply concerns because India is the world’s third-largest oil importer and one of the biggest refining hubs. The country is also the fourth-largest refiner and the fifth-largest exporter of petroleum products globally.
Energy analysts say India had begun replacing some Russian crude with supplies from West Asia in recent months. However, with the conflict now threatening oil flows from Gulf producers, New Delhi is again turning to Moscow to secure supplies.
Following the waiver announcement, Brent and WTI crude prices slipped more than 1 per cent on March 6, trading around $84.4 and $79.9 per barrel respectively.
Meanwhile, India has invoked emergency powers and directed refiners to maximise production of liquefied petroleum gas (LPG) to prevent a shortage of the cooking fuel after supply disruptions caused by the West Asia crisis, according to a government order.
A senior official in the Union Ministry of Petroleum and Natural Gas (MoPNG) earlier told Down To Earth that any blockade or sustained disruption could delay cargoes, raise freight and insurance costs and tighten global LPG availability as a significant share of India’s LPG imports passes through Hormuz.
Because LPG contract prices are closely linked to crude benchmarks, a price surge could inflate India’s import bill and increase pressure on subsidy outlays. India sources LPG from a diversified basket across West Asia and beyond, but prolonged instability could strain supply chains and complicate fiscal management.
The official added that there is no concern for at least a week and the Indian government will attempt to shield domestic consumers from immediate price transmission.
The world’s second-biggest importer of LPG last year consumed 33.15 million tonnes of cooking gas, which is a mixture of propane and butane.
Imports account for about two-thirds of LPG consumption, with West Asia making up about 85-90 per cent of that supply.
The war has also rattled global fuel and gas markets.
Shipping costs for fuel tankers have surged as traders scramble to secure supplies, with tanker rates rising sharply on routes from Singapore to Japan and from the United States to Europe.
European gas markets have seen even sharper price gains. Benchmark European natural gas futures have jumped nearly 70 per cent since last week after Qatar halted liquefied natural gas shipments from key export facilities following drone strikes.
Nearby US gasoline futures have climbed about 10 per cent over the same period, while the US national average gasoline price has risen to about $3.25 per gallon, roughly 27 cents higher than a week ago.
The escalation intensified after Iran’s Islamic Revolutionary Guard Corps announced restrictions on vessels from the US, Israel, Europe and allied countries passing through the Strait of Hormuz, further raising fears of supply disruptions.
The strait is the main export route for oil and liquefied natural gas from Gulf producers, and nearly 20 per cent of global oil trade passes through the narrow waterway.
Energy markets have become increasingly sensitive to such geopolitical shocks in recent years. The COVID-19 pandemic disrupted global supply chains in 2020, while the Russia-Ukraine war in 2022 forced Europe to rapidly diversify energy sources, driving price volatility worldwide.
The latest disruption is also reinforcing the case for electrification and renewable energy as a buffer against geopolitical shocks.
India offers one example. Since 2016, Indian Railways has undertaken a massive electrification drive, completing 99.4 per cent electrification of its network and targeting net-zero emissions by 2030, highlights Riding Sunbeams, a UK-based organisation that works towards electrification of railways and says that the shift has significantly reduced dependence on diesel fuel derived from imported crude, nearly 40 per cent of which historically came via the Strait of Hormuz.
Globally, the energy transition is also accelerating. Around 82 million tonnes of liquefied natural gas passed through the Strait of Hormuz in 2025, equivalent to about 1,200 terawatt hours of gas energy. In comparison, global solar power generation increased by roughly 600 terawatt hours last year, highlighting the growing role of renewable electricity in the energy system.
With the West Asia conflict threatening major oil and gas flows, analysts say the episode underscores the urgency of diversifying energy systems and accelerating the shift to domestic clean power sources.