The increasing tension between Israel and Iran is certain to impact India along with other countries of the world. Due to this tension, crude oil prices have already started rising. It may increase further due to the possibility of oil supply disruption. India, being the third largest oil importer in the world, is one of the major countries taking oil from Iran. Due to this, the increase in crude oil prices may have the biggest impact on India.
According to the Reuters agency, after Iran’s missile attack on Israel, Brent crude futures rose by 83 cents, or 1.13%, to $74.39 per barrel. Similarly, the rate of US West Texas Intermediate crude increased by 88 cents, or 1.26%, to reach $70.71 per barrel. The prices of both crude benchmarks have increased by more than 5% during trading. Experts monitoring the market say that if Israel retaliates, there could be a huge increase in crude oil prices. The rising prices of crude oil have worried India. India is a major consumer country in the world, due to which oil prices have a direct impact on the country’s economy. High oil prices increase the country’s transportation and production costs. Due to this, many sectors are affected, and the inflation rate starts increasing. As its impact on the general public increases, consumer spending and economic growth begin to slow down.
Experts say that if Israel retaliates and tensions flare up in the Middle East, Iranian oil supplies may be affected. Apart from this, other oil-producing countries may also join this conflict. All these will have an impact on oil production, and oil prices will also increase. This can create a crisis in the way of India’s development. It is believed that a $10 increase in crude oil prices leads to a 0.5% decline in India’s GDP.
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