There are said to be ongoing tensions and violence in the Israel-Palestine region in the Middle East. Will the repercussions of this turmoil reach even India? Not too long ago, Russia’s invasion of Ukraine was said to send shockwaves through the global supply chain. And what could this Israel-Palestine conflict mean for Indian households? Maybe, it could threaten to disturb the balance of the global oil supply. In October 2023, there was said to be an impact of this growing maelstrom on the supply of crude oil.
Crude oil is a fossil fuel that is said to serve as a raw material for many industries. In India, the primary use of crude oil in India is said to be for energy production. So, it could be used in oil refineries to produce gasoline, diesel and more. This is said to be used for transportation for cars, trucks and more. In India, the petrochemical industry is said to use raw materials derived from crude oil for items, like plastics, chemical solvents and synthetic rubber. Geopolitical tensions and conflicts in the Middle East could lead to uncertainty in the global oil market.
Disruptions in oil production could lead to a spike in oil prices. And rising crude oil prices could contribute to inflation in India, with increased fuel and energy costs that could lead to higher prices for goods and services for a couple of sectors of the Indian economy. So, this could impact the cost of living for Indian households and strain household budgets, leading to reduced purchasing power. India is said to have historically imported oil from Iran.
And if Iran plans to have a role in the conflict, it may mean that the US could tighten enforcement of sanctions, which could affect Iran’s oil supply. This is said to potentially have oil prices not just rise, but spiral out of control. So, through a series of dominoes, this could disrupt the economic stability of Indian households.
And the oil issue could also impact the production and transportation of consumer durables, like TVs and washing machines, which could affect their prices. Because, plastics, for instance, are used in many electronic and home appliances, for which crude oil is said to be used.
