Oil warms on conflict, but inflation may escape heat

Escalating conflict between Iran and Israel and a consequent increase in crude price are unlikely to impact India's inflation print, economists said, with state-run refiners expected to absorb the price hike instead of passing it on to consumers.

- Shayan Ghosh & Rituraj Baruah

MUMBAI/NEW DELHI:

Brent crude prices have been rising since Friday, after Israel struck Iran's nuclear facilities and killed several top officials and scientists. Iran vowed "harsh punishment" after the strikes and has retaliated.

Experts said the trajectory of oil prices depends on whether Iran closes the Strait of Hormuz, through which about a fifth of the world's oil supply passes. On 14 June, Al Jazeera reported citing Iranian news agency IRINN that Iran is considering closing the strait. For India, which imports close to 90% of its energy requirements, the impact on inflation would depend on the benevolence of state-run oil marketing companies.