Crude Oil Share Price India- The Big Oil Question Is Back To Haunt Indian Economy And Markets

Crude Oil Share Price India

What is the outlook for crude oil and is it going to impact India? The big query is back, with crude oil rallying to $73/bbl in the light of the ongoing war between Israel and Iran. But, first the facts.

 Trigger for an oil price spike

While Israel officially launched attacks Crude Oil Share Price India on Iranian nuclear facilities and its key scientists on Friday 13-June, the talk of a full-fledged attack has been doing the rounds for over a month. From 02-May to 13-Jun; the price of Brent crude rose 28.2% from $57.12/bbl to $73.25/bbl. It is not just about Iran being a major oil exporter, but also about its very critical location near the Strait of Hormuz, that is the heart of oil trade in Asia. That is the real trigger for the oil price spike.

Shorter the war, better for India

Based on the principles of supply and demand, the primary element influencing fluctuations in oil prices is identified.In times of geopolitical strife; supply drives the oil price; while in normal times, demand drives oil prices. India may not depend heavily crude oil price today in india on Iran for its oil supplies; as the bulk of Middle East oil to India comes from UAE, Iraq, and Saudi Arabia. The largest supplier of crude to India, today, is Russia. However, even in the case of Russian oil, the erstwhile discounts are not available any longer. The fear is, if Iran blocks the Strait of Hormuz, then the Russian oil that takes the Eastern route, could command a premium. In any case, oil bill would be much higher.

Some real macro numbers

To understand the impact of crude oil spike, some macro numbers would be of help. It is estimated that a $10/bbl rise in the price of crude oil, adds around 35 bps to the consumer inflation. In the last 40 days, the oil price is up $15, so that is around 50-55 bps of impact on inflation. With inflation at 2.82% in May 2025, that kind of a spike should be perfectly manageable.Top Oil Trading Platform Concerns could arise only if Brent Crude crosses $85-90 per bbl. The effect of oil on the current account deficit (CAD) would be the most significant worry. A $10 rise in crude oil has an impact of around 45-50 bps on the CAD. That is slightly more worrisome, due to the impact it has on rupee value; as also on the sovereign rating of India.

How does the road ahead look?

For India, the concern would be if it is a prolonged war in the BSE Middle East and in West Asia.  Israel may have achieved its short-term objective and may not want to pursue the war beyond a point. Even Iran may restrict itself to some targeted drone attacks and not go much beyond that. Iran is aware that the US is on the side of Israel and Russia may be too preoccupied in Ukraine.crude oil stock price today Iran also cannot expect any support from the Middle East nations, who are keen to focus on their economies. The good news is that the war may fizzle out and oil will be back to its demand play. 

 

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