Oil Markets Face Uncertainty As US Curbs On Iran Threaten Global Supply

Global oil markets are facing fresh uncertainty after the United States moved to restrict Iran’s oil trade. This step could remove nearly two million barrels per day from global supply, according to recent assessments.

Analysts indicate that the disruption could tighten availability and push up fuel prices worldwide.

A note by Nomura, citing sector analyst Bineet Banka, warned that any escalation around the Strait of Hormuz may also affect India’s LPG imports. The report pointed out that at least eight LPG carriers from India had recently navigated the route successfully over the past month.

US President Donald Trump has stated that vessels would not be allowed to make payments to Iran for transit through the Strait.

While Indian shipments have not been subject to such charges so far, the evolving situation remains uncertain.

Nomura further cautioned that prolonged tensions could limit the effectiveness of Strategic Petroleum Reserves in offsetting supply losses. This could potentially lead to sustained increases in crude prices.

Diplomatic developments have also influenced market movement. Talks between the US and Iran, held in Islamabad and led by US Vice President JD Vance, ended without a breakthrough.

Following this, crude prices briefly climbed to $107 per barrel on Monday before easing below $100 on Tuesday amid renewed expectations of dialogue.

Over the past week, Brent crude has risen about 6.5 per cent to around $98 per barrel.

Analysts believe continued uncertainty could add a higher geopolitical risk premium to prices. This is particularly likely if stricter restrictions on shipping through the Strait are enforced.

Oil-exporting countries in the region have shown mixed trends. Saudi Arabia’s revenues increased by 4 per cent year-on-year in March, supported by higher prices despite lower export volumes.

The country has reportedly achieved full capacity of 7 million barrels per day on its East-West pipeline. This pipeline bypasses the Strait of Hormuz.

Domestic refining needs stand at about 2 million barrels per day. After accounting for this, exports could rise to nearly 5 million barrels per day. This compares with 4.4 million barrels per day in March 2026.

The United Arab Emirates recorded a modest 3 per cent decline in oil revenues during the same period. In contrast, Iran emerged as a major gainer, with oil revenues estimated to have risen 36 per cent year-on-year to $5.7 billion in March 2026.

Market participants continue to monitor both geopolitical developments and supply adjustments, as further escalation could significantly impact global energy flows.

Also Read: Iran Blames US After Islamabad Talks Collapse; Tensions Escalate