Crude eases after crossing $90 as US-Iran war enters fifth month

Oil prices took a breather on Monday after Brent crude briefly surged past the $90 per barrel mark for the first time in the current US-Iran conflict. The benchmark later eased, settling lower as traders locked in gains and reassessed the true risk to global supply.

Brent crosses $90, then pulls back

Brent crude futures touched $90.14 in early Asian trade before sliding back below $89 by afternoon. The move marks the highest level since the conflict escalated five months ago. West Texas Intermediate, the US benchmark, also rose but stayed below its recent highs.

The spike followed an escalation in hostilities over the weekend. US forces carried out strikes on Iranian targets for the ninth consecutive day, according to reports. Tehran has vowed retaliation, but so far no major oil infrastructure has been hit.

Why oil hasn't gone 'crazy'

Despite five months of open conflict between two major oil players, crude prices have not spiralled out of control. Analysts point to a key reason: actual oil supply has not been disrupted. Iran's exports were already under heavy sanctions before the war. The Strait of Hormuz, a critical chokepoint for global oil shipments, remains open.

"The market has priced in a contained conflict," one energy analyst told Reuters. "As long as the strait stays open and Saudi production is untouched, the panic premium is limited."

The US has also released strategic petroleum reserves to calm markets, and OPEC+ has kept spare capacity ready. These buffers have prevented the kind of runaway prices seen during earlier Gulf wars.

Stock markets rise despite tensions

Equity markets in India and across Asia largely shrugged off the oil spike. Indian benchmark indices opened higher, with energy and defence stocks leading gains. Analysts said investors are betting on a stable resolution or at least a prolonged but manageable status quo.

"Markets are looking past the headlines to the fundamentals," said a Mumbai-based fund manager. "Corporate earnings are strong, and the RBI has enough forex buffers to handle a temporary oil shock."

The Indian rupee held steady against the dollar, helped by the central bank's intervention and a dip in crude prices later in the day.

What to watch next

All eyes remain on the Strait of Hormuz and any signs of Iranian retaliation that could threaten tanker traffic. The US has increased naval patrols in the region. Diplomatic backchannels, including through Oman and Iraq, are reportedly active but have not yielded a ceasefire.

Traders will also watch the weekly US inventory data due Wednesday. A larger-than-expected drawdown could reignite the rally. For now, the market appears to be in a wait-and-watch mode, pricing in a tense but contained standoff.