India is in danger from the war in the Middle East! What will be the backup plan after the break in oil supply?

New Delhi: The smoke rising from the Middle East has now started affecting the economy of the entire world. The increasing military conflict between America, Israel and Iran is not limited to just the borders, but its impact is clearly visible on the global markets. The situation became more serious after the death of Iran’s supreme leader Ayatollah Ali Khamenei in the Israeli attack. Taking retaliatory steps, Iran decided to close the Strait of Hormuz, which has increased concern all over the world.

The Strait of Hormuz is considered the most important link of global oil supply. About 20 percent of the world’s crude oil passes through this sea route. In such a situation, if this route is closed, then the availability of oil in the international market is directly affected.

In recent days, the price of Brent crude has reached $ 73 per barrel. In the last one month, the prices have increased by about 6 dollars. Experts believe that if the tension continues for a long time, crude oil prices may go up to $100 to $110 per barrel. If this happens, the global economy will suffer a major blow.

What impact will it have on India?

India meets a large part of its energy needs through imports. In such a situation, due to oil becoming expensive in the international market, the country’s import bill is sure to increase. However, at present the common people can get immediate relief because there has been no major change in the retail prices of petrol and diesel for a long time. Government oil companies do not immediately pass on the direct burden of global fluctuations to consumers.

But if the crisis drags on for a long time, its impact may be visible gradually. Expensive crude oil can reduce the profits of Indian refinery companies. Also, current account deficit may increase due to higher foreign exchange expenditure. This is natural to create pressure on the rupee, which can further increase inflation.

India has backup!

The Strait of Hormuz is very important for India. About 40 percent of the country’s crude oil and 55 percent of LNG imports come through this route. In such a situation, any obstruction on this route can affect India’s energy security. Considering the seriousness of the situation, Indian refinery companies have intensified work on alternative plans. Efforts are being made to supply oil from such ports which are not dependent on the Hormuz route. A strategy is being made to increase supply from other ports of Saudi Arabia and UAE. Apart from this, preparations are also being made for additional purchases from oil producing countries outside the Gulf region.