Will Israel-Iran conflict affect oil prices in India? Fuel rates to…

Earlier this week, Israel's surprise airstrikes on Iran have tumbled global energy markets, surging oil prices and raising concerns of a major disruption in supplies if the conflict persists. The price of the benchmark Brent crude rose more than USD 6 to reach a five-month high of USD 78 per barrel on Saturday (June 14).
A hike in crude oil prices eventually leads to a rise in fuel costs and freight charges. Read on to understand how the ongoing conflict, which is showing no signs of a halt as yet, may impact oil prices in India.

What experts are saying
Experts say the long-term impact on oil prices will be determined by whether oil exports are affected by the conflict. "The attack is obviously bullish near term for oil prices, but the key is whether oil exports will be affected. When Iran and Israel exchanged attacks last time, prices spiked, then fell once it was clear the situation wasn't escalating and oil supply was unaffected," Richard Joswick, a top analyst at S&P Global Commodity Insights, told the news agency ANI.
India imports 80 percent of its oil requirements, even though most of its does not directly come from Iran.

India's big worry
A major concern for India is the potential impact to the Strait of Hormuz, which is located between Iran and the Arabian Peninsula and remains a key chokepoint. Nearly 20 percent of global Liquefied Natural Gas (LNG) trade passes through this narrow waterway.
Analysts say that any disruption around the Strait of Hormuz may affect oil shipments from Iraq, Saudi Arabia, and the United Arab Emirates (UAE) -- key suppliers for India. It is also expected that a disruption on that route could take a toll on India's exports in terms of time as well as costs.

Can cuts be managed?
Meanwhile, the OPEC+ grouping of oil-exporting countries has announced another higher-than-expected production raise in July. This means that global oil markets remain well supplied and Iranian supply cuts, if any, can be accommodated for now, according to Emkay Global, a financial services provider.

Iran-Israel conflict
Israel launched unprecedented strikes against Iran on Friday, killing dozens of people including top-ranking military officials and several nuclear scientists while injuring hundreds others. In retaliation, Iran launched missiles and drones on Israel, resulting in several deaths and injuries to dozens. The situation remains highly tense with rising fears of a broader regional conflict.