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Indian and global markets are bracing up for another phase of volatility as tensions escalated again between the US and Iran. Just weeks after announcing a ceasefire, Donald Trump says it’s over.
Speaking to reporters, the US President said he no longer wanted to deal with Iran and declared the ceasefire effectively dead. His comments came after both countries accused each other of breaking the agreement reached last month.
Later, he also warned that Washington was preparing for another wave of strikes against Iran.
So what happened: according to the US, three commercial ships passing through the Strait of Hormuz, came under attack on Tuesday.
Washington blamed Iran and responded with what it called a “series of powerful strikes”, hitting more than 80 targets, including air defence systems, anti-ship missile sites, command centres and over 60 Revolutionary Guard boats.
At the same time, the US also revoked a waiver that had allowed Iran to continue selling oil.
He said, she said situation: Iran has rejected the accusations, calling the strikes a “gross violation” of last month’s peace agreement. It also vowed ‘crushing response’.
In response, Iran retaliated with strikes targeting Bahrain and Kuwait. The Islamic Revolutionary Guards Corps (IRGC) said it had targeted more than 85 US military facilities.
The impact: oil markets reacted immediately. Crude prices jumped as traders worried that tensions around the Strait of Hormuz could once again disrupt global oil supplies.
Nearly one-fifth of the world’s oil passes through this narrow waterway. Any disruption could push fuel prices higher, add to global inflation and keep markets on edge.
For India, which imports around 90% of its crude oil, a prolonged conflict could mean costlier oil imports and renewed pressure on inflation.
