The crude oil prices rose to above $100 per barrel on Monday as the U.S. Navy prepares to block the Strait of Hormuz to restrict the flow of Iranian oil shipments in international waters. The U.S. is intensifying pressure on Iran after both countries failed to reach a deal during recent negotiations in Islamabad. 

Brent crude futures climbed $7.60, or 7.98%, to $102.80 a barrel by 2310 GMT, rebounding after a 0.75% decline on Friday. U.S. West Texas Intermediate rose $8.31, or 8.61%, to $104.88 a barrel, following a 1.33% fall in the previous session. 

The skyrocketing oil prices, caused by unrelenting geopolitical uncertainty, are impacting every sector while some are more vulnerable to it, such as aviation and Oil Marketing Companies (OMCs). 

“With Brent crude trading above $100 per barrel, the focus of the aviation and OMC sector has shifted from growth to survival/yield protection,” Balaji Rao Mudili, Research Analyst at Bonanza, said. 

Blocking the strait that is already blocked 

On Monday, U.S. President Donald Trump said, “Effective immediately, the United States Navy, the finest in the world, will begin the process of blockading any and all ships trying to enter or leave the Strait of Hormuz.” 

“Any Iranian who fires at us, or at peaceful vessels, will be blown to hell!” he wrote on his social media platform Truth Social. 

Following the announcement, the U.S. military said it would initiate a blockade of all Iranian ports within hours, with U.S. Central Command stating, “The blockade will be enforced impartially against vessels of all nations entering or departing Iranian ports and coastal areas, including all Iranian ports on the Arabian Gulf and Gulf of Oman,” adding that it would begin at 1400 GMT on Monday. 

Rising ATF costs to squeeze margins 

To protect margins amid rising fuel prices, major airlines such as IndiGo and Air India have scaled up fuel surcharges to set off rising ATF prices. “While yields are rising, the following tranches of ATF hikes will be one of the major factors expected to cause margin contraction in the coming quarters for non-hedged carriers,” Rao said. 

According to Rao, OMCs cannot pass on the full cost of expensive crude to consumers as fuel prices in India are politically sensitive. 

OMCs have typically maintained comfortable margins when Brent trades in the $75–85 range. However, at $100 and above, PSU OMCs are estimated to incur losses of around ₹104.99 per litre on diesel and ₹24.4 per litre on petrol, according to the Ministry of Petroleum and Natural Gas. 

“The margins are likely to be volatile, supported by inventory gains in the short term but dragged down by marketing losses in the medium term if the government keeps the retail price stagnant,” he said.