India can not stay insulated from the global oil shock, and the sharp rise in crude prices is immediately hurting the nation’s economic system, former Bharat Petroleum Company Ltd. (BPCL) Advertising Director Sukhmal Kumar Jain mentioned on Sunday, pointing to rising import prices and rupee depreciation as key considerations.
Talking on the impression of rising fuel prices, Jain mentioned the oil and fuel sector performs a significant position in India’s GDP and stays closely depending on imports, making the economic system weak to global value swings.
Additionally learn: Retail fuel value hike ‘inevitable’ if global oil pressures persist: BPCL’s Director HR
“No economic system is remoted from the world economic system,” Jain informed information company ANI, including that India imports almost 85% of its crude oil necessities.
He mentioned crude prices have jumped sharply from round $65–70 per barrel to just about $110–115 per barrel, marking a rise of just about 60%, which is “immediately affecting the economic system”.
The destiny of a depreciating rupee
Jain additionally flagged the weakening rupee as one other supply of strain, saying depreciation towards the US greenback was additional impacting GDP.
“The rupee has depreciated towards the greenback, additional impacting GDP. Economists repeatedly point out these pressures,” he mentioned.
The former BPCL govt additionally warned that India’s dependence on imports throughout key commodities was worsening the pressure on the economic system and forex.
“So far as oil-gas, gold, fertilisers, and edible oils are involved, with out controlling their imports, we can’t cease rupee depreciation, leaving the economic system closely affected,” Jain mentioned.
The $200 crude threat
Jain’s remarks come amid rising global considerations over oil provide disruptions linked to tensions across the Strait of Hormuz, one of many world’s most important power chokepoints.
A report by consultancy Wooden Mackenzie on Friday warned that global crude oil prices may surge to as excessive as $200 per barrel in a worst-case situation if the Strait of Hormuz stays closed for a protracted interval.
The report mentioned global power markets have remained on edge for the reason that begin of the Iran battle in February, with oil prices already climbing sharply and fuelling considerations round inflation, rate of interest hikes and broader financial disruption.
In accordance with the report, greater than 11 million barrels per day of Gulf crude and condensate manufacturing is at the moment curtailed, whereas over 80 million tonnes every year of LNG provide — round 20% of global provide — has been affected.
“The Strait of Hormuz is essentially the most vital chokepoint in global power markets, and a protracted closure would change into excess of an power disaster,” Peter Martin, head of economics at Wooden Mackenzie, mentioned within the report.
“The longer disruption persists, the higher the impression on power prices, industrial exercise, commerce flows and global financial development,” he added.
Additionally learn: Crude oil prices may hit $200 per barrel if Strait of Hormuz stays closed: Report
Peace, settlement or disruption? 3 potentialities
The report outlined three doable eventualities relying on how rapidly tensions ease and the Strait reopens.
Beneath essentially the most optimistic “Fast Peace” situation, the battle is resolved by June, permitting Brent crude prices to ease to round $80 per barrel by the top of 2026 and additional to $65 per barrel in 2027.
A “Summer time Settlement” situation assumes negotiations proceed till late summer season whereas the Strait stays largely closed, resulting in oil and LNG shortages by way of the third quarter of 2026 and elevating the chance of a shallow global recession within the second half of the 12 months.
Within the worst-case “Prolonged Disruption” situation, the Strait stays largely closed by way of the top of 2026, with recurring tensions additional limiting oil provides. Beneath this situation, oil prices may climb to $200 per barrel at the same time as global oil demand falls by 6 million barrels per day within the second half of 2026.
Wooden Mackenzie additionally warned that the global economic system may contract by as a lot as 0.4% in 2026 underneath the extended disruption situation.
The report added {that a} extended disaster may speed up the shift towards various power sources, significantly in Asia and Europe, with international locations rising electrification and lowering hydrocarbon use. It additionally projected a constructive outlook for US LNG exporters amid rising demand for diversified power provides.
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