Oil Rises 0.5% After Qeshm Strike Report; Indian Stocks Extend Gains
Key Facts
Oil prices and Indian stocks rose in Asian trading on Tuesday, November 3, after a report said the United States had struck Qeshm Island in the Strait of Hormuz. Brent crude rose 0.5% to $105.25 a barrel, while West Texas Intermediate gained 0.5% to $96.93, by 01:04 GMT, according to Reuters. In India, the Nifty 50 rose 0.76% to 23,622.25 points, and the Sensex gained 0.92% to 76,385.48 points by 9:32 a.m. local time. Reports of the strike revived concerns about escalation in energy markets, after crude prices fell sharply in the previous session. Oil price swings matter for India, which relies heavily on imports to meet its crude needs.
Oil rose after Brent ended Monday's session down $8.66, or 7.63%, at $104.77 a barrel. Reuters attributed the decline to talks between Iranian and Qatari officials that raised hopes of ending the war and stabilizing crude supplies from the Middle East. Tehran said Monday that contacts between Iran and the United States to end the war were continuing, after days of talks with Qatari mediators ended with revised proposals but no breakthrough. By contrast, the report of the strike on Qeshm raised fears of an escalation in the conflict and disruption to regional supplies. A U.S. official told Reuters that the United States had carried out strikes on the island, confirming an earlier report by The Wall Street Journal.
Before the conflict, the Strait of Hormuz carried about one-fifth of global crude oil and natural gas supplies, while traffic through it has fallen sharply as the war continues. Qeshm's location in the strait makes any military development there particularly sensitive for energy-flow forecasts across the region. India relied on imports for 88.6% of its crude oil between April 2025 and January 2026, compared with 88.2% in the corresponding period a year earlier, according to a government economic review. The review also said, citing the Reserve Bank of India's monetary policy report, that a 10% rise in crude prices above baseline assumptions could add 30 basis points to inflation if fully passed through to domestic prices. India's oil ministry said in March that crude and major petroleum product stocks were sufficient to manage short-term disruptions, and that supplies bypassing Hormuz would soften the impact of a temporary interruption to shipments.
Gains in Indian stocks extended beyond the two main indexes: 14 of India's 16 major sectors rose at Tuesday's open, while small-caps gained 0.4% and mid-caps rose 0.7%. The Nifty 50 and Sensex had jumped 1.7% on Monday, reaching their highest levels in more than five weeks and more than eight weeks, respectively. Preliminary data from the NSE showed foreign investors were net buyers of Indian shares worth 31.15 billion rupees on Monday, while domestic investors were net sellers of 3.92 billion rupees. Nomura analysts said they expected foreign investors' relative outlook on Indian equities to improve, supporting portfolio inflows in the near term. The moves coincided with broad market gains, with sources not directly linking the indexes' performance to the industrial data.
On domestic activity, India's industrial production index grew 6.7% year on year in September, after growth of 8.0% in the quick estimate for August, according to data published by the statistics ministry on October 28. Manufacturing grew 7.6%, while electricity and gas supply rose 11.2% during the month. Seventeen of 23 manufacturing industry groups recorded positive growth in September compared with the same month in 2025. The largest contributions included electrical equipment manufacturing, up 33.9%; rubber and plastic products, up 19.9%; and motor vehicles, trailers and semi-trailers, up 19.0%. India releases the quick estimate of its industrial production index on the 28th day of each month, or the next working day if the date falls on a holiday.
India's oil ministry said it had set up a round-the-clock monitoring room to track supplies and inventories, and the government expressed cautious optimism that further measures could be taken if needed. Iran-U.S. talks, which Tehran said were continuing, and the course of supplies through the Strait of Hormuz remain among the developments linked to crude price movements in the region. This comes after Iranian talks with Qatari mediators ended without a breakthrough, while the report of strikes on Qeshm revived concerns about escalation in trading. The available data did not specify a new date for mediation talks or a subsequent development in the supply situation. India's quick estimate of industrial production is released monthly on its usual date, the 28th.