IRAN, ISRAEL, AND INDIA'S OIL WORRIES

A WAKE-UP CALL FOR ENERGY SELF-RELIANCE

- Vivek Harivyasi

When bombs fall in West Asia, ripples are felt far beyond. As tensions between Iran and Israel escalate into open conflict, India finds itself navigating not just diplomatic sensitivities but also the sharp pinch of global oil price volatility. This isn't the first time geopolitics has hijacked energy markets—but it may be one of the most complex moments in recent memory.

The June 2025 airstrikes by Israel on Iranian nuclear and military installations, followed by Iran's missile retaliation, have not only raised the specter of regional war but also disrupted the global oil narrative. Brent crude surged past $90 per barrel within days of the strikes—its highest in nearly six months—before settling slightly lower. For an oil-importing nation like India, which sources over 80% of its crude from abroad, this spells immediate concern.

The rupee, unsurprisingly, reacted with fragility. On June 18, it slipped to Rs86.50 per USD—a two-month low—largely due to oil-induced dollar outflows (Reserve Bank of India, Weekly Data Release, June 2025). With each spike in crude prices, Indian oil marketing companies must shell out more dollars, exerting pressure on the current account deficit and contributing to imported inflation. In a nation where fuel prices trickle down to transportation, food supply chains, and household costs, the inflationary transmission is both direct and painful.