Oil costs rise as Iran refuses to meet with United States.

The global oil market saw a significant increase on Thursday as prices crossed the $100 per barrel mark. This was in response to Iran's statement that they were not engaged in direct negotiations with the US to end the ongoing war. This news caused Brent crude futures to rise by 1.21% to $103.46 per barrel, while US West Texas Intermediate crude jumped by 1.35% to $91.54 per barrel.

The tensions in the Middle East were a major factor in this escalation. Iranian Foreign Minister Abbas Araghchi clarified that the exchanges between Tehran and Washington, mediated by third parties, should not be considered as formal negotiations. In addition, Iran was expected to reject a ceasefire proposal backed by the US.

This announcement came after a sharp decline in international oil prices on Wednesday, as hopes for a ceasefire in the West Asia region grew. Experts believe that the recent correction in crude prices could bring some relief to India's macroeconomic indicators, such as inflation and the Current Account Deficit. However, technical indicators show that key support levels are being tested.

In India, a $10 per barrel change in crude prices usually affects the CAD by 0.3-0.5 percentage points of the GDP and increases CPI inflation by 20-30 basis points, depending on the pass-through effect. Meanwhile, Iran has declared that they will not impose any restrictions on vessels from five "friendly" countries, including India, allowing them to pass through the strategically important Strait of Hormuz. This decision comes despite limited access for other countries due to the ongoing conflict in the region.

Along with India, ships from Russia, China, Pakistan, and Iraq have been granted safe passage through the key maritime chokepoint. However, the Iranian official also stated that vessels from countries considered as adversaries or those involved in the current crisis would not be permitted to pass through the strait. This includes ships from the United States, Israel, and certain Gulf nations.

The tensions in the region have caused concerns over the safety of shipping routes, especially for countries like India that rely heavily on imported oil. Overall, the recent developments in the global oil market have raised economic and political concerns. As the situation in the Middle East continues to escalate, the impact on countries like India is expected to be significant.

This is something to closely monitor as events unfold in the coming days.