Rising tensions between Iran and Israel threaten India’s energy security, potentially driving up oil prices and fueling inflation. Experts warn that if oil prices increase to $100 per barrel, both wholesale and retail inflation could rise, though the impact on retail inflation may be moderated by oil marketing companies (OMC). However, the price escalation would need to persist for at least nine months to significantly impact India. ANOUSHKA SAWHNEY & KIRTIKA SUNEJA take a look:
Iran and Israel account for less that 1% of India’s total trade but hostilities could impact commerce with other major partners.
Strait of Hormuz disruption to hit oil supplies, raise fright costs
Threats to India’s energy security as oil prices may rise
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Immediate financial market impact on Rupee, FPI flow
Overall impact appears manageable if conflict does not prolong
