US-Iran conflict has pushed oil prices above the $100-a-barrel mark. (File Photo) The US-Iran conflict has moved from the battlefield to the global economy, and one of its clearest warning signals is flashing in the oil market. After weeks of relative calm following an earlier ceasefire, hostilities between Washington and Tehran have intensified again, with attacks involving oil tankers, threats to shipping and growing instability around the Strait of Hormuz and the Red Sea. The result: Brent crude has surged back above the $100-a-barrel mark, while US West Texas Intermediate has also crossed $100. Brent ended the week at $104.61 a barrel and WTI at $100.05, with both benchmarks posting weekly gains of more than 8 per cent. What makes this oil rally particularly worrying is that it is not being driven simply by stronger global demand. It is being fuelled by fears that a prolonged US-Iran conflict could disrupt the routes through which a huge volume of the world's oil moves. For India, that makes the latest crude shock much more than a geopolitical headline. The latest escalation has put the Strait of Hormuz back at the centre of the energy crisis. The US has struck Iranian oil tankers, while Iran has attacked ships near the Strait. At the same time, Iran-aligned Houthi forces have intensified their activities around Yemen and the Red Sea, threatening the Bab el-Mandeb shipping route as well. That combination has traders worried about a wider supply disruption. Oil prices had fallen sharply earlier this year after a ceasefire between Washington and Tehran raised hopes that the conflict was winding down. Brent had dropped to just above $70 in early July. But that optimism has now evaporated, with the benchmark climbing back above $100. For India, expensive crude is particularly uncomfortable because the country imports more than 88 per cent of its crude oil requirements. India's crude basket has already crossed $100 a barrel, with the basket reaching around $108.91 during the week. Analysts have warned that a sustained increase could widen India's oil import bill, pressure the current account and eventually feed into domestic inflation. Higher crude means higher costs for refiners and oil marketing companies. It raises transportation and logistics expenses and can eventually affect everything from manufactured goods to food distribution. So far, domestic fuel prices have not moved in line with the magnitude of the global oil rally. But the longer crude remains elevated, the greater the pressure on oil companies and policymakers. Indian equities have already begun pricing in the risk. The Sensex and Nifty both declined more than 2 per cent over the week, marking a fifth consecutive weekly fall. The Sensex closed Friday at 74,781.76, while the Nifty ended at 23,398.10. The biggest risk is no longer simply that oil has crossed $100, but what happens if the US-Iran conflict escalates further. Analysts have warned that worsening disruption around major shipping routes could push crude towards $120 a barrel. Conversely, any meaningful diplomatic breakthrough or restoration of normal shipping through the region could bring prices sharply lower. That makes the next phase of the conflict crucial for oil markets. For India, every additional dollar matters. A temporary spike can potentially be absorbed. But a prolonged period of $100-plus crude would put pressure on the rupee, inflation, fuel prices, corporate margins, government finances and economic growth all at once.