Due to the ongoing tension in West Asia, there may be a huge jump in the prices of crude oil across the world. Manoranjan Sharma, Chief Economist of Infomerics Ratings, has warned that if this dispute continues for a long time, the price of crude oil could reach $120 (USD 120) per barrel. This will have a direct impact on the common man’s pocket and India’s economy. Oil prices have already crossed the $90 mark on March 7, 2026.
What is the current condition and future of crude oil?
Recently, crude oil prices have rapidly increased from $70 to close to $90 per barrel. The increasing tension between America and Iran and activities around the Strait of Hormuz have spooked the market. Experts say that if the situation does not improve, prices will go up further. According to Infomerics, if this crisis continues for a long time, the economic equations of the entire world may deteriorate.
What effect will this have on India and the common man?
India buys most of the oil it needs from outside, so the impact here will be profound. India’s budget was made keeping in mind the price of crude oil at $70 per barrel. If the price increases by $10, inflation in the country may increase by 0.2 to 0.4 percent. Neighboring country Pakistan has already increased the prices of petrol and diesel by Rs 55 per liter. In India too, there is a danger of increase in the prices of freight and everyday items.
How much will the burden on the government treasury increase?
The Finance Ministry has also admitted that the impact of this crisis may be deeper than expected. If we look at the figures, the situation may seem worrying:
Every $10 increase in crude oil increases India’s import bill by $13-14 billion. This will also affect the Current Account Deficit (CAD) of the country. Although America has given a relaxation of 30 days to buy oil from Russia, this relief may be temporary. In the stock market too, pressure may be seen on sectors like automobile and paint.
