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Tension increases in the Gulf, apprehensiveness of raising the inflation in India!

Saturday - June 22, 2019 3:04 pm , Category : WTN SPECIAL
Iran and America at the edge of war!
Iran and America at the edge of war!

Iran-US tension out values the crude, Indian foreign reserves to be affected

JUNE 22 (WTN) - The rising tension between Iran and the US will increase the inflation in India. After reading this, definitely you are thinking that why this is going to happen. Indeed, the cost of crude oil is increasing due to the situation of war between Iran and the US. If this continues to happen then it has a big impact on India. Actually, the tension between Iran and the United States has increased after Iran shut down a US Navy drone on the Hormuz strait.

After the US drone shut down by Iran, the US President Donald Trump has given a threat to stifle a tough stand against Iran, it has created a tense situation in the Gulf region. It is being said that if there is a war between Iran and the United States, it can obstruct the supply of crude oil and its prices may increase significantly. If this happens then it is a cause for concern for India, because India is fully dependent on oil imports for its oil needs.

For your information, let you know that India imports 90 per cent of its crude oil requirement. India is mostly dependent on crude oil for Gulf countries. Tensions have increased in the Gulf region after Iran shut down America's drone, which prompted Brent crude oil prices to rise 5 per cent, which is the highest since January. India has expressed concern over the sudden increase in the prices of crude oil, because if crude oil prices continue to rise, petrol and diesel in India will be costlier.

Because of the US sanctions, India is unable to import crude oil from Iran, due to which India has to complete this quota from Saudi Arabia and other oil exporting countries. After a sudden rise in the prices of crude oil and then due to no oil importing from Iran, India has asked Saudi Arabia, a key member of the oil exporting group OPEC, to play an active role in controlling the prices of crude oil so the problems being faced by India may get less.

For your information, let you know that Brent Crude Oil has reached the level of 65 dollars per barrel. By the beginning of June, the prices of crude oil remained steady in the international market, due to which the prices of petrol and diesel are controlled at this time in India. But the results of the increase in the prices of crude oil in the fourth week of June will be revealed till the second week of July. But the rise in the prices of crude oil internationally is natural to have an impact on India's economy. That is why, because India will have to spend a lot of foreign currency reserves in importing crude oil, which will have adverse impact on India's Foreign Reserve.

For your information, if crude oil goes to expensive, then it is natural to increase the prices of petrol and diesel in India. If the diesel is expensive then inflation is going to increase. With the diesel being expensive, transportation expenditure will increase, which will have direct impact on the prices of everyday items. That is, if the tension between Iran and the US increases and the war is called then crude oil prices may increase by at least 20 to 25 per cent. In this case, petrol and diesel in India will be expensive in the same proportion and the inflation in the country will increase. Now it is necessary to see if the war between Iran and the United States starts, then first how the crude oil export may be possible from the Gulf in the event of war, and if it does, how much inflation will increase in India due to the rising prices of crude oil.