{"id":14521,"date":"2025-06-14T13:33:03","date_gmt":"2025-06-14T13:33:03","guid":{"rendered":"https:\/\/roydadnaft.ir\/English\/?p=14521"},"modified":"2025-06-14T13:33:03","modified_gmt":"2025-06-14T13:33:03","slug":"israel-iran-conflict-to-impact-oil-supply-to-india-increase-export-costs-by-40-50","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/14521\/","title":{"rendered":"Israel-Iran conflict to impact oil supply to India, increase export costs by 40-50%"},"content":{"rendered":"

RoydadNaft – <\/a><\/span>\u00a0Israel\u2019s attack on Iran and heightened tensions in the area pose significant risks to India in terms of curtailed supplies of oil and a 40-50% increase in the export costs, according to analysts and trade experts.<\/p>\n

Early on Friday (June 13, 2025), Israel said it had struck \u201cdozens\u201d of nuclear and military targets in Iran, following which Iran reportedly retaliated with drone strikes of its own.<\/p>\n

Following these developments, global oil prices jumped about 8% in a single day, sparking fears that a sustained escalation could push inflation in India up, since it imports about 80% of its oil requirement.<\/p>\n

Problems for India<\/h4>\n

\u201cThe ongoing Iran-Israel conflict is likely to pose risks to oil supply even though India does not directly import large volumes of oil from Iran,\u201d Amit Kumar, Partner and Energy & Renewables Industry Leader at Grant Thornton Bharat told The Hindu<\/i>. \u201cIndia imports more than 80% of its crude oil needs. Hence, even if direct imports from Iran are minimal, global price spikes due to conflict will raise crude oil import costs.\u201d<\/p>\n

Further, Mr. Kumar said that around 20% of global oil passes through the Strait of Hormuz, which is located between Iran to the north and the Arabian Peninsula to the south.<\/p>\n

\u201cAny disruption around the Strait of Hormuz may affect oil shipments coming from Iraq, Saudi Arabia, and the UAE who are key suppliers for India,\u201d he added.<\/p>\n

Disruptions in this area could also significantly hurt India\u2019s exports in terms of time as well as costs, according to Pankaj Chadha, Chairman of the Engineering Exports Promotion Council of India.<\/p>\n

\u201cThe escalation of the conflict in the Middle East once again closes access to the Suez Canal and the Red Sea, which will have a huge cost and time escalation for Indian exports by ship,\u201d Mr. Chadda told The Hindu<\/i>.<\/p>\n

\u201cGoing around the Cape of Good Hope will add about 15-20 days per ship and $500-1,000 per container, which effectively works out to a 40-50% increase in costs,\u201d he added.<\/p>\n

Impact on prices<\/h4>\n

While oil prices immediately surged following Israel\u2019s attack, they are expected to settle back down, according to Norbert R\u00fccker, Head of Economics and Next Generation Research at Julius Baer.<\/p>\n

\u201cOur best guess is that this latest conflict eruption follows the usual pattern, with prices rising temporarily before returning to previous levels,\u201d Mr. R\u00fccker said. \u201cThe oil market is very resilient today and supplies are unlikely at risk. Storage is ample, spare capacity plentiful, and exports grow outside of the Middle East.\u201d<\/p>\n

The price of gold, too, surged to above Rs 1 lakh per 10 grams following the attack as investors flocked to \u2018safe haven\u2019 assets.<\/p>\n

\u201cIn times of conflict and uncertainty, gold remains the go-to hedge for both institutional and retail investors,\u201d Amit Jain, co-founder of Ashika Global Family Office Services said. \u201cWhat we\u2019re witnessing isn\u2019t just a knee-jerk reaction. It\u2019s a continuation of a broader structural uptrend driven by central bank accumulation, weakening fiat confidence, and long-term inflationary concerns.\u201d<\/p>\n

Updated on