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    BUSINESS & TRADE                                                         APRIL 10, 2026    |  The Indian Eye 38

                     India Faces ‘Perfect Storm’ as Iran War

            Ripples Across Oil, Markets and Consumption

                      Rising crude prices, supply disruptions and capital outflows are

                                     converging to strain India’s economic stability.

            OUR BUREAU
            New Delhi / Mumbai

               ndia’s  economy  is  confronting  a
               “perfect storm” of external shocks
            Itriggered  by  the  ongoing  West
            Asia  conflict,  with  surging  crude  oil
            prices,  supply  chain  disruptions  and
            foreign capital outflows combining to
            heighten  inflationary  pressures  and
            dampen growth prospects.
                At the centre of the crisis is the
            sharp  escalation  in  global  oil  pric-
            es, with analysts warning of extreme
            scenarios if geopolitical tensions per-
            sist. Vandana Bharti, Research Head
            -  Commodity  at  SMC  Global  Securi-
            ties, said crude oil could rise to USD
            150  per  barrel  under  severe  condi-
            tions, describing it as “a very alarming
            situation.”
               “After USD 130, USD 150, I think
            many political alliance, they will come   If the Gulf energy crisis extends beyond April or May, the economic consequences could deepen significantly in India, particularly with rising
            forward and they will stop it... other-
            wise, it will be a mayhem,” Bharti told                               summer energy demand (ANI file photo)
            ANI, pointing to the likelihood of glob-
            al intervention if prices spiral further.  The  pressure  is  also  visible  in   heavily  dependent  on  imports  from   “It comes back down to just this risk-
                Benchmark  crude  prices  are  al-  domestic  markets.  MCX  crude   Ukraine and Russia, is facing longer   off  environment...  it’s  more  capital
            ready elevated, with WTI trading at   prices  have  surged  from  about  Rs   shipping  routes  and  higher  war-risk   preservation.  It’s  moving  away  from
            USD 107-108 per barrel, Brent near   6,000  before  the  conflict  to  above   insurance  premiums.  Retail  prices   riskier  assets  and  into  safe  havens,”
            USD  106  and  Murban  crude  above   Rs  10,000,  after  touching  Rs  10,500,  have risen to Rs 170-175 per litre from   he said.
            USD  113.  For  India,  the  impact  is   and  could  rise  further  to  Rs  11,000-  around Rs 150 in January, prompting   He added that emerging markets
            more acute, with its crude basket “al-  12,000.  Meanwhile,  the  rupee,  cur-  consumers  to  shift  towards  cheaper   like India are particularly vulnerable
            ready  near  USD  150”  compared  to   rently around 93.11 per dollar, could   alternatives such as rice bran and soy-  during  such  periods.  “Investors  are
            USD 70-75 at the start of the year, re-  weaken to 97-98 if global crude prices   bean oils.          moving  out  of  equities,  especially
            flecting  rising  freight,  insurance  and   climb to USD 120-130, widening the   While  refiners  are  expected  to   some  emerging  markets  which  are
            supply costs.                     current  account  deficit  and  fuelling   maintain stable revenues due to high-  more susceptible to potential damag-
                The  surge  comes  amid  signifi-  imported inflation.          er realisations, declining volumes and   es and escalation,” Maxwell noted.
            cant supply disruptions of around 10   Compounding  the  energy  shock   tightening inventories signal stress in   Looking  ahead,  the  duration  of
            million barrels per day globally, with   are broader supply chain disruptions   consumption patterns, a key pillar of   the conflict remains a critical variable.
            shipments through the Strait of Hor-  affecting key consumption sectors. A   India’s economic growth.  Bharti warned that if the crisis ex-
            muz under strain. Asia, home to 58.8   report  by  Crisil  Ratings  highlighted   At the same time, financial mar-  tends beyond April or May, the eco-
            per cent of the world’s population, is   that  demand  for  refined  sunflower   kets are witnessing significant foreign   nomic  consequences  could  deepen
            among the worst affected due to its   oil in India is expected to decline by   investor outflows amid a global “risk-  significantly,  particularly  with  rising
            reliance on imported crude.       around 10 per cent in the current fis-  off”  sentiment.  According  to  data   summer energy demand.
                Bharti warned that even incre-  cal due to higher prices and logistical   from  the  National  Securities  Depos-  “If it prolongs... then it will create
            mental  increases  in  oil  prices  could   challenges.             itory  Limited,  foreign  portfolio  in-  a real havoc for Indian economy as
            have  a  disproportionate  economic   “Indian refined sunflower oil vol-  vestors (FPIs) sold equities worth Rs   well,” she said.
            impact. “Every USD 10 increase in oil   ume is poised to decline ~10% in the   1,17,775 crore in March and an addi-  As global markets remain volatile
            prices could reduce GDP growth by   current fiscal, due to twin headwinds   tional Rs 19,837 crore in the first two   and geopolitical risks persist, India’s
            0.5 percentage points,” she said, add-  that will dampen demand,” the report   trading days of April.  economy appears increasingly exposed
            ing that prices above USD 120 could   said, citing disruptions linked to the   Ross  Maxwell,  Global  Strategy   to a convergence of external shocks,
            trigger  stagflation,  with  growth  slow-  West  Asia  conflict  and  increased  lo-  Operation Lead at V T Markets, at-  with  policymakers  facing  mounting
            ing to around 0.9-1 per cent alongside   gistics costs.             tributed the outflows to global uncer-  pressure to navigate what analysts de-
            rising inflation.                     India’s  sunflower  oil  industry,  tainty rather than domestic weakness.   scribe as an unfolding perfect storm.

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