Good morning. It has been a jumpy start to the week for oil and for markets more broadly, with a couple of different fronts abroad keeping traders on edge. None of it is abstract for a country that imports most of its energy, so let us get into what actually happened and why it matters here.
In today's newsletter: oil surges past $90 after fresh strikes near the Strait of Hormuz, and Modi tells Putin to move away from "endless war" at the SCO summit in Bishkek.
Closing levels · August 31, 2026
Sensex 76,957.27 DOWN 0.40% |
Nifty 50 24,080.40 DOWN 0.39% |
USD/INR 95.56 RUPEE DOWN |
Brent Crude $90.90 UP 3.2% |
Indian benchmarks fell for a second straight session as renewed military action near the Strait of Hormuz sent oil prices climbing again, weakening the rupee and denting risk appetite across the board.
US strikes near the Strait of Hormuz send oil above $90, rattling Indian markets
The United States struck Iranian rocket launchers on Larak Island on Sunday after surveillance showed crews preparing to fire sea mines into the Strait of Hormuz, according to the Washington Times. The strike reopened the most dangerous front in the standoff after a month of relative calm, and Tehran responded with strikes of its own on US-linked bases elsewhere in the region.
Brent crude jumped more than 3 percent to trade above $90 a barrel, and Indian benchmark indices fell for a second straight session, with the Sensex down 307 points and the Nifty slipping below 24,100 as investors priced in the risk of a longer standoff in the Gulf.
The stakes are higher for India than for most large economies. A sustained rise in oil prices adds directly to India's import bill and puts fresh pressure on the rupee, which has already been sliding against the dollar this year. Roughly 40 percent of India's crude, 60 percent of its LNG and 90 percent of its LPG move through the Strait of Hormuz, so a prolonged disruption is not an abstract worry in New Delhi.
This is the first direct US-Iran exchange in roughly a month, after weeks of smaller flare-ups around the strait. About a fifth of the world's seaborne oil transits Hormuz, so even a short disruption to shipping tends to move prices by more than the size of any single strike would suggest.
One Iranian official has already signalled that Tehran sees this as the opening move rather than the end of it, warning of a response "dozens of times greater" for any further American strike. Markets have so far priced this as a contained event; that warning suggests it may not stay that way.
At the SCO summit, Modi tells Putin to move away from "endless war"
Prime Minister Narendra Modi met Russian President Vladimir Putin on the sidelines of the 26th Shanghai Cooperation Organisation summit in Bishkek, where he told Putin that "every day spent in war sets humanity back" and called for a shift from endless conflict toward peace. The two leaders also reviewed the India-Russia strategic partnership, with energy and fertiliser supplies high on the agenda.
The meeting comes at an awkward moment for India's foreign policy. Xi Jinping, Putin and Modi shared a stage in Bishkek as the bloc pushed a vision of a more multipolar world order, even as New Delhi works to keep its economic relationship with Washington on track after a bruising year of tariff disputes tied to its Russian oil purchases.
For India, the calculus is practical rather than ideological. Russia remains a major source of discounted crude and defence hardware, including the remaining deliveries under the S-400 missile programme, at a moment when Delhi has little appetite to strain either its energy security or its ties with Washington.
Breaking.exe
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Roman's launch. NASA's Nancy Grace Roman Space Telescope launched aboard a SpaceX Falcon Heavy rocket and separated cleanly, beginning a mission to study dark energy and dark matter and survey more than 100,000 new exoplanets. |
Pangaea Revisited
Jordan, UAE targeted. Iran's Revolutionary Guard launched drones and missiles at Jordan's King Hussein and Al Azraq bases and a drone toward the UAE, though Jordan says it intercepted eight missiles with no casualties. |
China's factory slump. China's factory activity contracted for a second straight month in August, with the manufacturing PMI at 49.8, as soft domestic demand and a prolonged property slump continue to weigh on the world's second-largest economy. |
Beijing's Eurasia bid. Xi Jinping used the SCO summit to push a proposed SCO development bank and deeper connectivity funding, a bid to cement Beijing's role as the bloc's financier as it marks 25 years. |
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Blackstone trims stake. Blackstone opened a sale of up to a 25 percent stake in Knowledge Realty Trust, its Indian office REIT, in what is being billed as the largest offer-for-sale in the country's private sector to date. |