Oil holds near $95 as Strait of Hormuz fears intensify

Despite the spike in crude prices, US stock markets remained resilient, with the S&P 500 and Nasdaq hitting fresh record highs.

2 min readJun 2, 2026 11:06 AM IST

For India, sustained high oil prices could pose macroeconomic challenges.

Oil prices remained elevated on Tuesday as uncertainty surrounding negotiations between the United States and Iran kept markets on edge. Brent crude, the global benchmark, held near $95 a barrel after surging more than 4 per cent in the previous session, while US crude traded around $92 a barrel.

The rise comes amid concerns that tensions in West Asia could disrupt energy supplies and delay the reopening of the Strait of Hormuz, a critical route for global oil shipments.

Also read | India’s oil shock could have been much worse — but for China

Despite the spike in crude prices, US stock markets remained resilient, with the S&P 500 and Nasdaq hitting fresh record highs. However, sectors sensitive to fuel costs, including airlines, came under pressure as investors weighed the impact of higher energy prices.

For India, sustained high oil prices could pose macroeconomic challenges. A report by 360 ONE Capital estimates that if crude averages $90 per barrel in FY27, retail inflation could rise to 4.8% from 4.1%, while GDP growth may slow to 6.3% from 6.7%.

The report also projects a wider fiscal deficit and current account deficit under such a scenario. Analysts have also warned that prolonged tensions could put pressure on the rupee, with the currency remaining vulnerable to any escalation in the conflict or further disruption to shipping through the Strait of Hormuz.

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