Brent crude climbed back above $100 a barrel as fresh US strikes on Iran and strong warning statements from Tehran sent traders scrambling to price in the risk of a disruption to one of the world's most critical oil shipping routes, the Strait of Hormuz.

The move marks a significant shift in oil market sentiment. For weeks, diplomatic signals around a potential US-Iran nuclear deal had kept a lid on crude prices, with markets betting that a deal could eventually bring more Iranian barrels back to global supply. Those bets are now unwinding fast.

Why the Strait of Hormuz Changes Everything

The Strait of Hormuz is the narrow waterway between Iran and Oman through which roughly a fifth of the world's traded oil passes every day. It is the single most important chokepoint in global energy supply. Any credible threat to shipping there, whether through mines, naval action, or airspace closure, forces buyers in Asia, Europe, and beyond to recalculate supply security almost immediately.

Iran's warning statements following the US strikes have raised the perceived probability that Tehran could move to restrict or threaten passage through the strait. That shift in risk perception, even without confirmed physical disruption, is enough to drive a sharp price response. Oil markets price expected supply, not just current supply.

The $100 level matters beyond the number itself. It is a psychological threshold that changes behavior across the supply chain. Airlines review fuel hedges, shipping companies adjust route pricing, refiners reassess margins, and central banks start updating inflation projections. When crude crosses that level, the effects ripple outward quickly.

What This Means for Markets and Inflation

A sustained move above $100 tightens conditions in several ways at once. Fuel costs feed into transport, manufacturing, and food supply chains, which puts upward pressure on consumer prices at a time when central banks in the US, Europe, and India are still managing inflation carefully.

For India, the exposure is direct. India imports roughly 85 percent of its crude oil needs, making it one of the most sensitive large economies to a sustained price spike. A higher oil import bill widens the current account deficit, pressures the rupee, and can feed through to domestic fuel prices depending on how the government manages retail pricing at the pump.

Equity markets with heavy exposure to energy-intensive sectors, such as aviation, logistics, chemicals, and paints, face margin pressure if prices stay elevated. Oil and gas producers and upstream service companies, on the other hand, see earnings tailwinds.

The uncertainty around the US-Iran peace process is now the dominant variable. If talks collapse entirely or escalate into wider military confrontation, markets could price in an even larger risk premium. If a ceasefire or diplomatic back-channel emerges, the spike could reverse sharply, as it did during earlier phases of the conflict when deal optimism pushed prices lower.

OPEC+ decisions add another layer of complexity. The group has spare capacity it could deploy to offset a supply shock, but whether and how fast it chooses to act will depend on member consensus and individual revenue calculations, especially among Gulf producers who have their own diplomatic relationships with Tehran.

For now, traders are watching two things: whether Iran moves from warnings to action in or around the strait, and whether US-Iran talks find any footing after the latest strikes. Until there is clarity on either front, the directional bias for crude prices stays to the upside.