India Faces Indirect Risks As Israel–Iran Clash Fuels Oil Price Surge, Threatens Key Trade Route: Report

The escalating confict between Israel and Iran has shaken global energy markets, with oil prices spiking amid fears of supply disruption from the key West Asia region, NDTV reported.

Following Israel’s surprise airstrikes on Iranian military and nuclear facilities, and Iran's retaliatory strikes, Brent crude surged over $6 to a five-month high of $78 per barrel on Saturday (14 June).

The potential negative ramifications for global trade resulted in a sharp fall in US equities too.

India imports about 80 per cent of its crude oil requirement. While it is not directly dependent on Iranian supplies, its concern lies with the Strait of Hormuz.

This vital shipping lane handles nearly 20 per cent of global LNG trade and a significant share of crude exports.

LNG supply could be at risk if Iran chooses to retaliate by threatening maritime traffic through the Strait of Hormuz. 

Disruption on the route could hurt India's exports in terms of time as well as costs.

The conflict is also likely to negatively impact Iranian crude supplies.

According to a report by financial services firm Emkay Global, the oil market continues to have ample supply and with OPEC+'s surprise decision to ramp up production again in July there is enough room to absorb any additional shortfall from Iran.

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