Oil shock rattles OMCs as crude vaults past $100 on Hormuz flashpoint

The trigger was a fresh geopolitical flare-up after the US Navy moved to restrict vessel movement linked to Iran through the Strait of Hormuz, a corridor that carries a significant chunk of the world?s oil trade. The move followed the collapse of weekend negotiations between Washington and Tehran in Islamabad.

Back home, the Street reacted swiftly. Shares of Hindustan Petroleum Corporation dropped up to 3.97%, Bharat Petroleum Corporation fell 3.41%, and Indian Oil Corporation declined 3.01%.

The underlying worry is simple but brutal: when crude rises faster than pump prices, OMC margins get squeezed. With fuel prices often moving with a lag in India, any sustained rally in oil could dent profitability.

Interestingly, this surge comes despite a ceasefire technically being in place. Markets, however, seem to have moved on. After an initial 15% crash in oil prices post-ceasefire, crude has now snapped back as traders price in renewed supply risks.

Donald Trump confirmed that the naval blockade would go ahead, marking a clear escalation after prolonged diplomatic efforts failed. He also hinted that high fuel prices may linger through the upcoming US midterm elections.

On the other side, Iran?s Revolutionary Guards have issued a stern warning, saying any foreign military movement near the Strait would be treated as a violation, keeping the risk of further escalation uncomfortably high.