Global markets have come under pressure since the Iran war began, with equities falling, crude oil prices rising sharply and volatility increasing across asset classes.
Dalal Street has been no different. Indian markets have seen sharp swings in recent sessions, as rising oil prices and global uncertainty weigh on investor sentiment.
For many investors, the bigger problem is not just falling markets, but the confusion around what to track. Headlines continue to shift between escalation and de-escalation, while oil forecasts vary widely.
In this backdrop, Nakul Sarda, fund manager and proprietary investor, says he has stopped relying on headlines and is instead tracking a few key signals that reflect real market activity.
“Trump says the war ends tomorrow. Iran says Hormuz is shut forever. One analyst says $150 oil, another says $60. You can’t build a portfolio view on this,” Sarda said in a post on X.
Sarda said the situation is especially important for India.
“We run an India-focused equity fund. 85% of India’s crude comes from imports. Half of that normally passes through Hormuz. So yes — this crisis is personal,” he said.
Any disruption in this route can push oil prices higher, affect inflation and weigh on markets.
FOUR SIGNALS INVESTORS SHOULD TRACK
Instead of reacting to headlines, Sarda said investors should focus on four indicators that reflect actual risk and supply conditions.
“These are priced by people with real money on the line. They don’t lie,” he said.
Ship insurance premiums
Sarda said the cost of insuring ships passing through the Strait of Hormuz is the most important signal.
Before the conflict, insurance cost about 0.25% of a tanker’s value. This has now risen sharply to between 3.5% and 10%, with demand falling.
“A $100M tanker that cost $250K to insure now costs up to $10M,” he said.
According to him, a drop in premiums below 2% would signal improving safety conditions.
Ship movement data
He also pointed to the number of ships crossing Hormuz as a key indicator.
Before the crisis, more than 100 ships passed through daily. That number has now dropped to around 8.
“That’s a 92% collapse. You can’t spin a ship being somewhere it isn’t,” Sarda said.
He added that a recovery to 30–40 ships per day would indicate that trade is resuming.
Paper oil vs real oil
Sarda said many investors are missing the gap between benchmark prices and actual transaction prices.
Brent crude is around $112, but Dubai physical crude — which Asian buyers pay — is closer to $126.
“That gap exists because headlines move paper prices, but real buyers aren’t getting any discount,” he said.
“If you’re looking at Brent to assess India’s oil bill, you’re looking at the wrong number.”
Mid-April risk
Sarda also flagged mid-April as a key period.
Several temporary measures supporting supply are expected to expire around that time, including strategic reserve releases and policy waivers.
“Right now these stopgaps are keeping the supply gap at about 5 mb/d. Without them, it could double,” he said.
“If Hormuz doesn’t reopen by mid-April, we’re in uncharted territory.”
Sarda said investors should avoid reacting to daily news flow and instead focus on these signals to understand how the situation is evolving.
“Track the insurance premium, the ship count, the paper-physical spread, and the April timeline. Everything else is noise,” he said.
As markets remain volatile, these indicators may offer a clearer view of whether the pressure on markets is likely to ease or continue.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
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