Oil Prices Surge as Iran Rejects Direct Peace Talks with US

Mumbai: Global oil prices jumped past $100 per barrel on Thursday after Iran denied engaging in direct negotiations with the US to end the war.

As Middle East tensions escalated, Brent crude futures rose 1.21% to $103.46, while US West Texas Intermediate (WTI) jumped 1.35% to $91.54. This surge follows a sharp price decline on Wednesday when markets briefly hoped for a West Asia ceasefire.

Iran Clarifies Diplomatic Stance

Iranian Foreign Minister Abbas Araghchi stated that Tehran does not view exchanges through intermediaries as formal negotiations. He further indicated that Tehran would likely reject the current US-backed ceasefire proposal.

Strategic Impact on the Strait of Hormuz

In a significant maritime update, Iran announced it will grant safe passage through the Strait of Hormuz to vessels from five “friendly” nations:

• India

• Russia

• China

• Pakistan

• Iraq

Conversely, Iran will block transit for adversaries, specifically targeting ships from the United States, Israel, and certain Gulf nations involved in the crisis.

Economic Implications for India

Market experts warn that the recent price volatility directly threatens India’s macroeconomic stability. Historical data shows that every $10 movement in crude prices impacts India significantly:

• Current Account Deficit (CAD): Shifts by 0.3–0.5 percentage points of the GDP.

• Inflation (CPI): Increases by 20–30 basis points.

While the “friendly nation” status may secure India’s physical supply routes, the global price spike continues to test key technical support levels and inflationary targets.