Brent crude oil extended its rally for the fifth consecutive session on Thursday, climbing above $98 per barrel to its highest level in nearly six weeks as geopolitical tensions in West Asia fueled concerns over global energy supplies. 

The latest spike follows an escalation in the ongoing US-Iran conflict and renewed attacks by Yemen’s Iran-backed Houthi group on Saudi oil tankers in the Red Sea, raising fears of prolonged disruptions to two of the world’s most critical shipping routes, the Strait of Hormuz and the Bab el-Mandeb.

The surge in crude prices triggered broad-based selling in Indian equities. By early afternoon, the Sensex had dropped over 480 points, while the Nifty 50 slipped nearly 0.7%, marking the fourth straight session of losses. 

Higher crude prices typically increase India’s import bill, add inflationary pressure, and weigh on sectors such as aviation, paints, chemicals, and oil marketing companies. Most NSE sectoral indices traded in negative territory, with only the auto index showing relative resilience. Midcap and smallcap indices also ended in the red as investors turned cautious.

Market sentiment weakened further after maritime authorities reported that a commercial tanker was struck about 70 nautical miles southwest of Al Shuqaiq in the Red Sea, causing a fire onboard. 

The Houthi group later claimed responsibility, stating it had targeted two Saudi oil tankers, Encelia and Layla, using ballistic missiles, cruise missiles, and drones, alleging the vessels had violated its recently announced maritime blockade. 

Saudi authorities confirmed that Encelia was hit but reported that all crew members were safely evacuated and efforts were underway to secure the vessel.

The latest developments have heightened concerns over the stability of global oil supplies, with analysts warning that any prolonged disruption to Red Sea shipping could tighten crude availability and keep energy prices elevated. Investors will now closely monitor geopolitical developments and their potential impact on inflation, global trade, and financial markets in the coming weeks.

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