Brent Crude Oil Crosses $110 Mark Amid Iran-US War; Oil Prices, LPG Gas Crisis to Deepen?

Brent Crude Oil Price Rally: The benchmark brent crude futures surged again from $100 to around $112 per barrel mark on Thursday morning as the Iran-US war continues to escalate tensions across the West Asia. The sharp surge in crude oil prices can also impact the Liquified Petroleum Gas (LPG) production cost.

Brent Crude Futures Above $110 Per Barrel

The brent crude futures surged above the $110 per barrel mark on Thursday, March 19. The sharp spike came as the commodity extended its rally due to a fresh attack on key energy infrastructure in the Middle East. Oil prices have jumped by more than 50% since the beginning of the Iran-US-Israel war on February 28. The war has lead to a massive blockade in the Strait of Hormuz impacting the global energy supply.

Attack on Key Energy Infrastructure in West Asia

The sharp surge in brent crude oil has come after Israel th launched air strikes on world's largest natural gas field, South Pars. The gas field is located offshore in the Persian Gulf and falls in the maritime border of Iran and Qatar.

In another development, Iranian missile strikes also hit the Ras Laffan industrial city, which is Qatar's primary gas hub. The industrial hub is reported to have received significant damage. As the conflict widens across the West Asia, the United Arab Emirates (UAE) shut its gas facilities after intercepting missiles and air strikes on Habshan gas facilities and at the Bab oil field.

LPG Supply Concerns in India

The sharp surge in crude oil prices and the escalation of the West Asia conflict is likely to raise cocerns around LPG cylinder supply in India. Nearly a week after the beginning of the IRan-US war, LPG gas cylinders in India saw one of the steepest price hikes in last ten years. LPG cylinder price in India increased by Rs 60 (for domestic LPG cylinder) and by Rs 115-144 for commercial LPG cylinders (of 19 kg). The hike was attributed to rising energy cost and supply disruptions in the West Asia.

Days after the price hike, several reports emerged of LPG cylinder supply crunch across parts of India. Although the Indian government has assured that there is no LPG supply shortage across the country. To curb the illegal hoarding of LPG cylinders, the government has tightened curbs on LPG cylinder bookings. The central government has also increased the booking period to for LPG gas cylinders in urban as well as rural areas.