Brent Crude prices spiked as much as 5% on Monday following the US airstrikes on Iran’s key nuclear facilities on Sunday. The move ended days of speculation over whether the US President Donald Trump would join Israel in its confrontation with Iran.While prices surged initially, they soon pared gains. The attacks on Fordow, Natanz and Isfahan had led to expectations of a sustained oil rally. Iran is the third-largest producer in the OPEC+ bloc and accounts for around a third of global oil output.Last week, Brent Crude futures rose 11%, touching $80 per barrel before retreating. Prices rebounded again as Trump kept markets guessing on the US’s involvement, but hopes of a ceasefire and ample supply from OPEC+ capped further gains. Analysts noted that demand remains weak, giving little reason for oil to hold elevated levels.OPEC+ is scheduled to meet on July 5 to discuss another output hike for August, after already increasing supplies by 4.11 million barrels per day in June and July.Saul Kavonic, an energy analyst at MST Marquee, said, “Much depends on how Iran responds in the coming hours and days, but this could set us on a path toward $100 oil, if Iran responds as they have previously threatened to,” Iran claims it reserves the right to respond to the US attacks. Local media reports its parliament has approved the closure of the Strait of Hormuz, though the final call rests with its National Security Council. The US has urged China to discourage Iran from taking that step.The Strait of Hormuz is a critical oil chokepoint, more than 20 million barrels per day, or 20% of the world’s oil supply, passed through it last year, according to the US Energy Information Administration.Goldman Sachs has warned that a closure of the strait could push oil prices above $100 per barrel. However, JPMorgan views the possibility as low, saying such a move could be seen by the US as an “act of war.”Rising crude prices could hurt India’s economy, particularly oil marketing companies like HPCL, BPCL, and Indian Oil, along with industries like aviation, paints, and tyres that rely heavily on oil.Goldman Sachs’ Santanu Sengupta told CNBC-TV18 that a rise in crude to $75 per barrel would hurt India’s macroeconomic stability. A $10-per-barrel increase could raise the cost burden by 30–40 basis points.Samiran Chakraborty, chief India economist at Citi, also noted that supply chain disruptions could raise inflation risks, but said India may still be able to manage slightly higher prices due to its limited exposure to Iranian oil.US officials said no further strikes are planned for now, but warned that any retaliation from Iran would invite an even more forceful response.“This is the big one,” said John Kilduff of Again Capital, pointing to a possible $8-a-barrel risk premium. “The market default on this development is higher. How high depends on Iran’s response, or the realistic prospects of a meaningful response, which may not be there.”