As global oil prices spike amid US-Iran tensions near the Strait of Hormuz, India faces significant economic pressure due to its heavy reliance on energy imports.
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Crude oil prices update: In a significant global development impacting the global economy and inflation around the world, global crude oil prices traded higher on Wednesday, increasing by up to 1 per cent after the United States launched strikes against Iranian military targets near the Strait of Hormuz. Raising concerns over potential disruptions to energy supplies from the strategically important region, impacting crude oil prices and inflation across the world. In the recent development, International benchmark Brent crude was up about 1 per cent at $93.26 per barrel. Similarly, US West Texas Intermediate (WTI) crude gained 0.97 per cent to trade around $90 per barrel. Here are all the details you need to know about the recent crude oil price hike and possible impact on India.
Why is there a rise in crude oil prices?
The latest gains came after the US military said it had carried out what it described as self-defence strikes on Iranian air defence, ground control and surveillance radar sites near the Strait of Hormuz.
According to the US Central Command, the operation was launched in response to the reported downing of a US Army Apache helicopter in the region. However, Iran denied responsibility for the incident and said the helicopter crash was accidental.
Fresh escalation in tensions between Washington and Tehran
The development marks a fresh escalation in tensions between Washington and Tehran at a time when markets had been anticipating a gradual easing of hostilities in West Asia. Investor and trader sentiment also remained weak, leading to selling pressure in global equities.
Reports claim that US crude oil inventories fell last week for an eighth consecutive week If Israel persisted in attacking the Hezbollah militia in Lebanon, Tehran threatened to reopen hostilities.
Will rising crude oil prices impact India?
Because India imports over 85% of its crude oil, higher global prices instantly widen its trade deficit, weaken the rupee and increase import bills. This strains the economy by driving up domestic transportation and fuel costs, which triggers a cascading inflationary effect on daily essential goods.
