Brent crude price off day's low after falling to $81 levels: Key points to note

International oil benchmarks plunged on Tuesday as analysts weighed the latest developments linked to supplies from the Middle East, where a US-Israel-Iran conflict sizzled on in its second week. On February 28, joint US-Israel attacks against Tehran left Iran's Supreme Leader dead, triggering Iran's retaliatory action against several countries in the region.

Analysts particularly tracked headlines on the Strait of Hormuz, a crucial waterway where disruptions in the movement of tankers has caused supply-related fears in several parts of the world, including India.

About one-fifth of the world's oil and gas supplies pass through the Strait of Hormuz -- a 33-km-wide maritime chokepoint connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea.

Add Zee Business as a Preferred Source

Latest crude oil rates

At 11 pm India time, Brent and West Texas Intermediate (WTI) crude futures -- the two main oil benchmarks -- were down by $16.4 or 16.6 per cent at $82.6 and down by $16.1 or 17.0 per cent at $78.6 per barrel, respectively. However, both contracts were off intraday lows.

While Brent was snapping a three-day winning run, WTI was on track to finish lower after seven sessions of gains.

Earlier on Tuesday, Brent and WTI spiralled as much as 17.9 per cent and 18.9 per cent to $81.3 and $76.8 a barrel, respectively.

At the intraday low, Brent was down about 32 per cent from its recent peak.

What caused oil rates to cool?

According to foreign media reports, G7 officials signalling readiness to release supplies from their strategic reserves into the global inventory, if needed, eased the elevated levels seen in crude oil over the past few sessions.

The International Energy Agency (IEA) -- a Paris-based intergovernmental body -- called an emergency meeting to assess global supply security and market conditions, amid ongoing disruptions in the Strait of Hormuz.

Latest development in oil market

The UAE's biggest refinery halted operations after a drone strike caused a fire in the surrounding area, according to foreign media reports.

It could not be immediately ascertained as to which facility was impacted.

Crude oil remains in spotlight as world markets stare at Middle East

Crude oil benchmarks are widely viewed as a proxy for global markets. Financial markets, central banks, investors and analysts closely track crude oil rates for market signals, with any trade imbalances and geopolitical risks posing substantial inflationary pressures.

Brent and WTI crude YTD

Brent has traded in a nearly $60 range -- between $59.75 (January 5) and $119.5 (March 9) so far this year, with WTI moving in the $55.8-119.5 band.

Here are answers to a few frequently asked questions (FAQs) on the subject:

Why did global oil benchmarks plunge?

Analysts reacted to escalating Middle East supply concerns from the US-Israel-Iran conflict, now in its second week.

What role does the Strait of Hormuz play?

This 33-km-wide chokepoint channels about 20 per cent of global oil and gas from the Persian Gulf to the Arabian Sea.

What's happening in the Strait of Hormuz now?

Tanker disruptions have fuelled worldwide supply fears, including in India.

What cooled the oil price spiral?

G7 signals of strategic reserve releases eased tensions, while the IEA convened an emergency meeting on supply security amid Hormuz issues.

Why do crude benchmarks matter globally?

They are viewed as proxies for world markets, signalling inflation risks from trade imbalances and geopolitics, with Brent's YTD range at $59.75-$119.5 and WTI at $55.8-$119.5.