The escalating conflict between Israel and Iran has sent ripples across the globe, raising serious concerns about global peace and triggering a sharp rise in crude oil prices. As these two nations trade military blows, fears are mounting over the broader economic implications, especially for countries like India that heavily rely on imported crude. With global energy markets on edge, the big question for Indians is: Will petrol and diesel prices rise in the coming days?
The current crisis intensified after Israel launched airstrikes targeting Iran's nuclear and military installations this past Friday. In response, Iran issued strong threats of retaliation, fueling panic in global oil markets. Brent crude—the international benchmark for oil prices—soared by 8%, reaching around $75 per barrel. This surge reflects the heightened volatility and the potential for even more significant price spikes if the conflict escalates further.
While no major disruption in oil supply has occurred yet, energy analysts and refinery officials suggest that the mere threat of conflict is enough to create panic buying and speculative trading in the markets. Most oil-producing countries, including the U.S., Iran, and other West Asian nations, would not want the oil trade to come to a halt, as it could destabilize global markets and fuel domestic inflation—especially in oil-consuming countries like the United States.
Adding to the volatility is the "risk premium"—a kind of uncertainty cost that traders add to the price of oil in anticipation of supply threats. This has made crude oil costlier, despite there being no physical supply shortage yet.
India is particularly vulnerable to fluctuations in crude oil prices because it imports more than 80% of its oil needs. However, India has been working to reduce its dependence on West Asia. According to recent media reports, around 40% of India’s current oil imports now come from Russia. Moreover, India has diversified its sourcing by buying crude from multiple countries, which gives some cushion against regional disruptions.
Yet, higher global oil prices still pose a significant risk. They could squeeze the profit margins of Indian oil marketing companies like Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL). Experts believe that, under normal circumstances, oil prices should remain relatively low because the OPEC+ group (Organization of the Petroleum Exporting Countries and allies) is maintaining a high supply, while global demand hasn’t seen a dramatic rise. But the current geopolitical tensions are distorting this balance.
Apart from oil itself, other associated costs are also rising. Shipping charges and insurance premiums for oil tankers have gone up due to the risk of conflict, adding further financial pressure on importing nations. Speculation in the commodities markets is also inflating prices artificially.
At the moment, petrol and diesel prices at Indian fuel stations haven’t seen a noticeable spike. However, if crude prices continue to rise and remain elevated for a prolonged period, it could trigger a domino effect—leading to higher transport costs, increased logistics expenses, and ultimately, inflation in everyday goods and services.
In short, while Indian consumers may not immediately feel the pinch at the petrol pump, a sustained rise in crude prices could strain household budgets and put pressure on the broader economy. Policymakers, oil companies, and consumers alike will be watching developments in the Middle East very closely in the days ahead.
Disclaimer:
The information provided in this article is for informational purposes only and does not constitute financial or investment advice. Readers are advised to consult with financial experts or conduct their own research before making any economic decisions. The geopolitical developments and oil price trends mentioned are based on current reports and are subject to change.
