New Delhi, March 1 (IANS). If the Strait of Hormuz is affected by the US-Iran war, the price of crude oil may reach $ 90 per barrel. At the same time, if it turns into a major regional conflict, then this crude oil can reach $ 100 per barrel. This information was given in the report released on Sunday.
JM Financial Institutional Securities report said that currently the price of Brent crude is around $ 72.8 per barrel and a limited retaliatory strike could increase the prices by $ 5-10 per barrel and damage to Iranian oil infrastructure could increase the crude oil prices by $ 10-12 per barrel.
The report further said that every $1 increase in crude oil price increases India’s annual import bill by about $2 billion, putting pressure on the trade balance.
About 20 percent of global oil flows pass through the Strait of Hormuz and more than 40 percent of India’s crude oil imports go through this route.
The report said the stock market is likely to move from income-based trading to oil-based trading in the near future.
The brokerage firm estimates that energy and defense sectors may get relative support, while oil-dependent sectors such as oil distribution companies, paint, tyres, aviation and chemical sectors may face pressure. Crude oil remains the key macro variable for Indian stock markets in the current economic growth scenario.
Explaining the relationship between crude oil price and stock markets, the broker firm said, “The rupee is likely to depreciate in the near future, and possibly the RBI may intervene through foreign exchange reserves.
Prolonged tensions could increase logistics and maritime insurance costs, disrupt Gulf shipping routes and put pressure on the trade balance.
The company said that oil producing companies like ONGC and Oil India may get better profits, while shares of defense companies like HAL and BEL may see a positive trend.
The US and Israeli strikes killed Iran’s supreme leader Ayatollah Ali Khamenei and several senior IRGC, intelligence and national security officials.
On Saturday, the US and Israel launched coordinated attacks on Iranian nuclear facilities, missile infrastructure and command centers. Iran then retaliated by launching missile and drone attacks on American targets in the Middle East.
–IANS
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