New Delhi : Energy policy expert Narendra Taneja on Monday projected a short-lived period of volatility for the oil market following the recent Iran-Israel conflict escalations, while predicting the crude oil price to increase to around 80 dollars per barrel during the period.
Taneja expects stability to return within 7 to 10 days as he anticipates that the US and Israel are likely call for diplomatic negotiations after their objectives are met.
Speaking to ANI, Taneja said, “I’m worried about the way things are going, but my own sense is that probably within the next 7-10 days, things will begin to stabilise. Probably the United States and Israel are going to say, all right, we have achieved what we have set out to achieve, and they will call for peace or negotiations and so on.”
Highlighting that the Strait of Hormuz is of major significance for crude oil requirement, he said, “If you look at the oil sector as a whole, since oil is a very important commodity for the global economy. 60 per cent of crude oil that we purchase comes from the Persian Gulf area, therefore Strait of Hormuz becomes very important for us. However, my own sense is that the price of crude oil may go up maybe 80 dollars per barrel for the short term, maybe eight days, and so on.”
Taneja believes that the United States and Israel have likely calculated the duration and scope of their military operations to avoid a prolonged global energy crisis.
“But I don’t think we really need to worry too much about this at this stage. I think they have done the geopolitical math on how long the military operation, by the United States and Israel, is going to last…I’m not too worried about oil price at this stage,” Taneja stated.
Meanwhile, Brent crude prices have surged around 10 per cent amid escalating tensions in the Middle East.
Brent crude rose to as high as USD 78.52 per barrel, marking a sharp rise in prices as markets reacted to rising geopolitical risks in the region.
Ajay Bagga, Banking and Market Expert, told ANI that the confrontation between Iran and Israel has shifted from deniable operations to overt kinetic signalling, a transition that carries global implications.”The most critical variable is not tactical military superiority. It is energy logistics,” Bagga said.
He noted that roughly 20-22 million barrels per day, about one-fifth of global oil consumption, transit through the Strait of Hormuz. Even temporary disruptions in this key chokepoint elevate insurance premiums, freight costs, and crude benchmarks.
According to him, markets are already witnessing sharp increases in war-risk insurance premiums, tanker rerouting and naval escort activity, and higher embedded logistics costs.
Outlining possible oil pricing scenarios, Bagga said that in the case of limited escalation, Brent could rise to USD 100-115 per barrel. In the event of maritime disruption, prices may move to USD 120-140, while sustained closure risk could push oil to USD 150 or higher.
On the role of OPEC, he said Saudi Arabia and the UAE hold approximately 4-5 million barrels per day of spare capacity. However, most of that supply still relies on Hormuz transit.
“Spare capacity is helpful but not frictionless,” he said.
For oil-importing economies like India, Bagga said the transmission mechanism is direct. Every USD 10 increase in oil widens the current account deficit by roughly 0.4-0.5 per cent of GDP and raises CPI by 30-40 basis points.
“Geopolitical risk is no longer episodic. It is structural. 2026 marks the return of hard geopolitics,” Bagga said, advising investors to stress-test portfolios for USD 120 oil, diversify geography, own real assets and hedge currencies. (ANI)
