Bearish Risk: Brent Crude to $120/bbl on US-Iran Fears; OMCs

Crude oil prices are holding steady due to renewed fears between the US and Iran, with Citi analysts forecasting Brent crude to potentially reach $120 per barrel.

As a major oil importer, India is highly sensitive to global crude price fluctuations. A significant rise to $120/bbl would drastically increase India's import bill, potentially widening the current account deficit, fueling inflation, and putting pressure on the Rupee. This could lead to higher interest rates and impact corporate profitability.

This is bearish for Indian oil marketing companies (OMCs) like BPCL (BPCL), Indian Oil Corporation (IOC), and Hindustan Petroleum Corporation (HPCL) as higher crude prices squeeze their marketing margins if they cannot fully pass on costs. Airlines like InterGlobe Aviation (INDIGO) will face increased Aviation Turbine Fuel (ATF) costs. Auto companies like Maruti Suzuki (MARUTI) could see dampened demand due to higher fuel prices.

Traders should closely monitor geopolitical developments in the Middle East, particularly between the US and Iran. Watch for any official statements from OPEC+ regarding supply, and track India's inflation data and RBI's monetary policy stance in response to rising oil prices.

• •Crude oil prices steady amid renewed US-Iran fears.
• •Brent likely to rise $120/bbl, says Citi.
• •Risk flag: Escalation of US-Iran tensions
• •Risk flag: OPEC+ supply cuts
• •Risk flag: Global demand recovery