What is currently trending that oil and LNG prices will rise if Iran attempts to block the Strait of Hormuz, the conduit route via which India imports crude oil from Saudi Arabia, Iraq, and the UAE, resulting in a flaring up inflation.
The relationship between Iran and Israel is not very amicable, and a small spark from either side can ignite an ugly war-like crisis. Iran was the first to initiate calculated drone and rocket attacks on Israel, which has so far retaliated in a very controlled manner by employing missiles from its vast arsenal it possesses.
The disturbing component of this conflict is the direct impact on crude oil prices, which hover around $90 per barrel.
What should be done now is to continue efforts to de-escalate the growing regional tensions and manage the ongoing crisis. What concerns us is is about the emerging situation in case the Strait of Hormuz is intentionally and violently blocked forcibly by Iran.
This strait is a tiny waterway between Oman and Iran, with both incoming and outgoing ships. All oil exporting countries including Saudi Arabia, The UAE ,Kuwait, Qatar, Iraq sees this strait as a viable option for exploring their commercial opportunities. Liquified natural gas traders such as Qatar and UAE account for 20 percent of worldwide LNG exports. The Genuine concern is with the supply of liquefied natural gas, as exporters have no other route than the Strait Of Hormuz.
When it comes to crude oil and natural gas India is now completely dependent on Saudi Arabia, Iraq, the UAE and qatar.
Material cost for cruse oil and natural gas will be higher if the the route is shut and choosing an alternative route is fraught with danger due to the presence Houthi rebels.
India can conserve some foreign reserve with the russian crude oil supply it is availing now.
Hope Asia - pacific economy is not derailed because to Iran- Israel war threat resulting in oil and LNG shortages and unnecessary price hike.
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