New Delhi: Brent crude reached $78 a barrel, the highest price in five months, after Israeli warplanes struck sites associated with Iran’s nuclear program. Planners in New Delhi immediately began calculating the likelihood of steeper fuel bills since India imports nearly all the oil it consumes.
Violence erupted the day before when Israel launched Operation Rising Lion. Pilots targeted Natanz and several military installations, killing several senior Iranian officials. Tehran responded with a barrage of 200 ballistic missiles, resulting in the deaths of three Israelis and the injuries of numerous others. Global traders watched the news feed and pushed Brent up more than $6, a jump exceeding 10 per cent. The Middle East supplies roughly one-third of the world’s oil, so the anxiety was hardly confined to the subcontinent.
Over 80 per cent of India’s crude comes by tanker, chiefly from Iraq, Saudi Arabia, and the UAE. The Strait of Hormuz is therefore more than a pinch-point; it is the single lane through which 20 per cent of global oil and LNG shipments flow. When Tehran hinted again that the waterway might be shuttered, traders heard a clear warning.
Naveen Vyas, Senior Vice President at Anand Rathi Global Finance, calculated that any significant conflict could propel Brent prices beyond the benchmark we all monitor, directly impacting India’s economic growth.
On June 13, IOC, BPCL, and HPCL watched their share prices slip three to six per cent as the crude bill inched upward.
Harshraj Aggarwal at Yes Securities explained that each two-dollar increase slashes OMC margins by a full rupee for every litre of gasoline or diesel sold, but that does not include extra freight and insurance when ships divert or delay. Jitters about shipping can multiply those pains.
Analysts at Emkay Global still see OPEC+ adding barrels in July, which may keep Brent anchored around seventy-five dollars unless the lanes are hit directly. A longer standoff, however, runs the risk of pushing prices into the eighty-to-one-hundred range, and that will swell the fiscal deficit while dragging down the rupee’s buying power.
New Delhi’s planners are closely monitoring the market and discussing the strategic stockpiles as a buffer against potential shocks. For now, the economy braces itself for ripples, both seen and otherwise.
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