New Delhi is feeling the heat as tensions in the Middle East show no signs of cooling, with high oil prices likely to increase the country’s already substantial energy import bill, while disruptions to flight routes hamper airline operations.
India imports nearly 85% of its crude, equivalent to roughly 4.2 million barrels per day, said Pankaj Srivastava, senior vice president at energy research firm Rystad Energy, who said even “a few dollars’ increase in prices can materially affect [the country’s] energy economics.”
“Rising [oil] prices will weigh on the balance of payments and could put further pressure on the rupee,” he added.
Oil prices have soared since U.S. and Israeli strikes on Iran — the fourth-largest oil producer in OPEC — began over the weekend, putting a supply shock in focus. The Islamic Republic’s Supreme Leader Ayatollah Ali Khamenei was killed, prompting waves of attacks by Tehran across the region, targeting countries in the Middle East with U.S. military bases.
Brent crude prices hit a new 52-week high on Monday, surging 9.3% to reach $79.40 a barrel.
