Given the ongoing confrontations between Israel and the militant organisation Hamas, which is supported by Iran, the development has heightened the possibility of a wider conflict in West Asia. Beyond the region, the Iran-Israel conflict is already having an impact.
The price of benchmark Brent crude increased to above $90 per barrel before slightly declining. India, which imports more than 85% of its crude oil needs, is concerned about this.A sharp increase in the price of oil globally could result in a major increase in the nation’s oil import bill and a depreciation of the rupee due to the higher outflow of foreign cash.
Source: Reuters
Over the past year or two, India’s import expenses have decreased because of the purchase of less expensive oil from Russia, which is under sanctions. India, the world’s third-largest oil user and importer, has firmed up plans to construct its first commercial crude oil strategic reserve due to supply disruptions brought on by global unrest.
The government-established special purpose organisation Indian Strategic Petroleum Reserves Ltd is now accepting bids for the construction of an underground storage facility in Karnataka. It is anticipated that the project will only be finished by 2029–2030.India’s reliance on oil imports will not decrease in the near future. The shocks coming from West Asia are now testing the nation’s fortitude that was shown during the Covid-19 outbreak and the war in Ukraine.
Source: 10 Tampa Bay
India has quickly voiced its concerns about the “new emerging realities” and stated that any intensification of hostilities between Iran and Israel will jeopardise regional security and stability. Neutral nations like India can help prevent a global economic crisis by emphasising to all sides how important moderation is.
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