Mar 09, 2026 15:50 pm IST

Opinion | A $10 Billion Threat: How Exposed India Really May Be To Middle East's Oil Crisis

Every $10 increase in the price of Brent crude could widen India's current account deficit by roughly 0.3 to 0.4% of GDP, translating into over USD 10 billion in additional import expenditure.

Deepanshu Mohan, Ankur Singh Deepanshu Mohan, Ankur Singh

Deepanshu Mohan, Ankur Singh

As the stock market bleeds, trade's stopped in major routes, interlinked businesses collapse, each nation's macroeconomic resilience is under a severe stress test, especially, when a country's energy system is deeply embedded in fragile global networks. The rapidly escalating conflict in West Asia triggered by the US-Israel power axis and the rising instability surrounding Iran's response, its blockade of the Strait of Hormuz in a few days, illustrates how quickly such disruptions travel from tanker routes to macroeconomic fundamentals.

For a major energy-importing economy like India, the macroeconomic shock does not remain limited to oil prices. It moves almost immediately through the balance of payments, financial markets, and corporate balance sheets. The most immediate transmission mechanism is the balance of payments. India relies on imports for over 85% of its crude oil requirements, making energy prices one of the most powerful external determinants of macroeconomic stability.

Empirical estimates suggest that every ten-dollar increase in the price of Brent crude widens India's current account deficit by roughly 0.3 to 0.4% of GDP, translating into over USD 10 billion in additional import expenditure. 

What History Suggests

Energy shocks rarely occur in isolation. Periods of........

© NDTV