West Asia is heating up
Days after Tehran fired drones and missiles on Israeli land, Israel conducted a tit-for-tat strike on Iran on Friday. Given the ongoing confrontations between Israel and the terrorist organization Hamas, which is supported by Iran, this development has heightened the possibility of a broader battle in West Asia.
Beyond the area, the Iran-Israel conflict is already having an impact. The price of benchmark Brent oil increased to above $90 per barrel before slightly declining. India, which imports more than 85% of its crude oil needs, is concerned about this.
A sharp increase in the price of oil globally might result in a major increase in the nation’s oil import bill and a depreciation of the rupee owing to the higher outflow of foreign cash. Over the last year or two, India’s import expenses have decreased because to the purchase of less expensive oil from Russia, which is under sanctions.
India, the world’s third-largest oil user and importer, has firmed up plans to construct its first commercial crude oil strategic reserve due to supply interruptions brought on by global unrest. The government-established special purpose organization Indian Strategic Petroleum Reserves Ltd is now accepting bids for the construction of an underground storage facility in Karnataka. It is anticipated that the project will only be finished by 2029–2030. India’s reliance on oil imports will not decrease in the near future. The shocks coming from West Asia are now testing the nation’s fortitude that was shown throughout the COVID-19 outbreak and the conflict in Ukraine.
India has quickly voiced its concerns about the “new emerging realities” and said that any intensification of hostilities between Iran and Israel would jeopardize regional security and stability. Neutral nations like India may help prevent a global economic crisis by emphasizing to all sides how important moderation is.
