Crude oil prices remained largely steady in early trade on Thursday as investors assessed the latest developments in the US-Iran conflict and the outlook for shipping through the strategically important Strait of Hormuz.
Brent crude futures for October delivery rose 25 cents, or 0.3 per cent, to USD 91.87 a barrel by 0037 GMT. US West Texas Intermediate (WTI) crude for September delivery slipped 2 cents to USD 85.81 a barrel, while the more-active October WTI contract gained 14 cents, or 0.2 per cent, to USD 84.53 a barrel.
Both Brent and WTI had gained for a fourth consecutive session on Wednesday, settling at their highest levels since July 24. The September WTI contract is scheduled to expire later on Thursday.
The latest move in crude comes as markets track the possibility of further disruption to global oil supplies amid escalating tensions between Washington and Tehran.
US President Donald Trump on Wednesday announced what he described as the “most crushing economic operation ever taken” against Iran and warned countries providing financial, business, airport or government support to Tehran of “tremendous economic consequences”.
Trump said the measures would target Iran’s oil smuggling networks, financial transfers, exchange houses, ship registries and front companies. He also reiterated that Iran would not be allowed to acquire nuclear weapons.
Strait of Hormuz remains key crude trigger
The Strait of Hormuz remains a major focus for oil markets, as it is a critical route for global energy supplies. Trump said the waterway remained open and claimed that the US naval blockade had been effective. He also argued that increased production from US states such as Texas, Alaska and Louisiana, along with new pipelines and alternative supply routes, had reduced dependence on the Strait.
However, Iran has indicated that it will not reopen the Strait until the US fulfils commitments under a 14-point Memorandum of Understanding, including lifting the blockade, releasing frozen Iranian assets and easing oil sanctions.
This uncertainty is keeping a geopolitical premium in crude prices.
Brent could stay near USD 80 over next 12 months
According to a JM Financial report, Brent crude is likely to remain around USD 80 per barrel over the next 12 months, supported by demand for inventory replenishment and ongoing geopolitical risks.
The brokerage, citing International Energy Agency (IEA) data, said global oil inventories have fallen by around 1,000-1,200 million barrels since the beginning of the West Asia crisis.
This could create restocking demand of around 2-3 million barrels per day over the coming year.
Strategic petroleum reserve accumulation by major consuming countries, including India, continued supply disruptions in the Gulf, and higher freight and insurance costs are also expected to support crude prices. The additional freight and insurance costs are estimated to add a premium of around USD 3-USD 5 per barrel.
JM Financial expects crude prices to remain supported near USD 80 before moderating towards USD 70 a barrel over the medium term.
The IEA expects the global oil market to remain in a supply deficit of 1.3 million barrels per day in CY26. However, the market could move into a surplus of 4.6 million barrels per day in CY27 as West Asian supplies normalise and the Strait of Hormuz reopens.
Global crude supply recovered by 2.4 million barrels per day month-on-month in July 2026, but remained 6.3 million barrels per day below July 2025 levels.
The IEA expects global oil demand to contract by 1.5 million barrels per day in CY26 to 103.3 million barrels per day, before rebounding by 2.4 million barrels per day in CY27.
What does higher crude mean for Indian oil stocks?
The impact of higher crude prices is mixed for Indian oil companies. Upstream producers such as Oil and Natural Gas Corporation (ONGC) and Oil India stand to benefit from higher crude realisations.
JM Financial said the current valuations of ONGC and Oil India are factoring in net crude realisations of only around USD 55-USD 60 per barrel.
According to the brokerage, every USD 1 per barrel increase in global crude prices can improve the earnings per share of both companies by around 1-2 per cent.
This makes upstream companies relatively better positioned if crude prices remain elevated for longer.
OMCs face margin pressure
For downstream oil marketing companies (OMCs), however, higher crude prices can create pressure.
State-owned fuel retailers such as Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) buy crude oil and process it into products such as petrol, diesel and aviation turbine fuel.
When crude prices rise sharply, their input costs increase. If retail fuel prices are not increased proportionately, marketing margins can come under pressure.
Therefore, a prolonged period of crude prices around USD 90 a barrel could remain a near-term concern for Indian OMCs, particularly if domestic fuel prices remain relatively stable.
On the other hand, a moderation in crude towards USD 80 and subsequently USD 70 a barrel, as projected by JM Financial, could provide some relief to downstream companies.
What investors will watch
For Indian markets, the key variables will be the direction of crude prices, developments around the Strait of Hormuz, the duration of supply disruptions and the possibility of a US-Iran agreement.
A sustained rise in crude could benefit upstream oil producers such as ONGC and Oil India, while putting pressure on the margins of IOC, BPCL and HPCL.
For the broader Indian economy, elevated crude prices could also increase the country’s import bill and create pressure on inflation and the current account.
