A full-blown Israel-Iran war can imperil India's oil security
Middle East after Iran attacked Israel with barrage of missiles on Tuesday night. While Israel has vowed to make Iran «pay» for firing missiles at its territory, Tehran warned on Wednesday it would launch an even bigger attack if it is targeted. A full-scale war between the two countries will not bode well for India's energy security as India imports a large part of its oil and gas from the region.
Oil prices climbed more than 3% on Wednesday as Israel and the United States vowed retribution over Iran's biggest ever direct attack on Israel, Reuters reported. With Israel also ordering more soldiers into Lebanon to battle Iran-backed militant group Hezbollah, the conflict has rapidly intensified with little sign of de-escalation despite international pleas. That has sent oil prices surging, with Brent futures up $2.26, or 3.07%, to $75.82 a barrel. US West Texas Intermediate (WTI) crude jumped $2.38, or 3.42%, to $72.22 by 1320 GMT. Both crude benchmarks on Tuesday surged more than 5% before closing around 2.5% higher.
A full-blown war can cause a big spurt in crude oil prices. India imports most of its oil and gas and higher prices will impact inflation as well as economic growth.
India's energy dependence on the Middle East
Despite India's rising oil imports from Russia, it still depends significantly on oil and gas imports from the Middle East.
The share of Russian oil in India's August imports declined to about 36% after rising for five straight months, the data showed. In July, Russian oil accounted for about
