intensified Iran-Israel clash causes worldwide market instability and financial strain for Indian citizens; here's the advice for average people amidst the chaos
Stepped-Up Tensions Between Iran and Israel: What Indians Need to Know About Potential Impact
The heated confrontation between Iran and Israel has sent ripples across the globe, especially hitting hard on the economic front, particularly oil, gold, and gas markets. Here's what you should know about the repercussions on India:
Crude Oil Bites Back
As the conflict erupted, crude oil prices surged nearly 12%. In the United States, the WTI crude jumped from $73.61 to $76.61 per barrel, while the Brent crude, the global benchmark, climbed to $77.77 per barrel. On India's MCX exchange, oil prices skyrocketed by USD 497 in just 2 days, reaching USD 6,295 per barrel.
When Gold Shines Brighter
In times of conflict or uncertainty, investors often flock to gold as a safe haven. In India, the price of 24-carat gold surged from Rs 97,455 to Rs 99,058 per 10 grams, hitting a new high of USD 3,423 per ounce globally.
Experts advise being cautious when investing in gold, as purchasing at record high prices can be risky. Instead, they recommend investing small amounts gradually and holding onto the investment for the long term.
Natural Gas Heats Up
In the United States, the price of natural gas jumped 3% to reach USD 4 per MMBtu. Meanwhile, prices in Europe soared to USD 12 per MMBtu, hitting a 10-week high.
Flights Delayed, Costs Soaring
The conflict has forced airlines to divert their routes due to the closure of airspace over Iran, Iraq, Jordan, and Israel. These longer routes have increased fuel consumption, potentially leading to higher ticket prices. Players like Air India have already faced disruptions, with their Mumbai-London flight returning mid-way.
Six Ways India May Be Affected
- Costlier Oil Imports: India imports 88% of its crude oil, and a USD 10 increase in costs could add 0.5% to the bill.
- Altered Trade Routes: Supply disruptions from the Middle East could lead to increased shipping costs for importing goods.
- Iranian Trade Stoppage: Exports of rice, pharmaceuticals, and diamonds to Iran may cease, impacting India's export sector.
- Israeli Weapons Delays: With Israel as a significant supplier of drones, radars, and missiles, any disruption in deliveries could affect India's defense capabilities.
- Costlier Farming Inputs: Inputs like urea and dry fruits could become more expensive, impacting agriculture and food prices.
- Chabahar Port Investment Threat: Given India's USD 370 million investment in the Iranian Chabahar Port, any disruptions or instability in the region could impact the returns on this investment.
A Peek into Your Wallet
If the conflict escalates, consumers could face increased costs in their daily lives:
- Petrol and diesel could rise by Rs 10 per litre.
- LPG and electricity bills may increase.
- Transport costs will surge, making vegetables, milk, and lentils expense.
- A middle-class family could spend an additional Rs 1,000 monthly.
Plan Ahead and Prepare
Before making any hasty decisions, consider the potential impact on your finances and budget. Be ready for possible inflation and slow economic growth. Cautiously consider any potential investments, particularly in gold, and carefully plan your expenditures accordingly.
[1] Enrichment Data: The uncertainty caused by the conflict often leads to higher crude oil prices, as seen with recent price jumps of over 10% in Brent crude.
- Despite the escalating tension between Iran and Israel, Mumbai news has highlighted the surge in WTI crude prices in the United States, which reached $76.61 per barrel from $73.61, potentially impacting India's oil imports and costs.
- The conflict between Iran and Israel has also caused a spike in gold prices in India, with 24-carat gold prices increasing from Rs 97,455 to Rs 99,058 per 10 grams. This might influence personal-finance decisions, especially with experts advising against investing at record high prices.
- The ongoing confrontation between Iran and Israel may have an impact on India's technology sector, as the price of natural gas in the United States and Europe has risen significantly.
- The escalating tensions between Iran and Israel may affect India's sports industry as well, considering airspace closures over Iran, Iraq, Jordan, and Israel have led to flight disruptions and potential costs increase for airlines like Air India.
- General-news sources suggest that the unrest between Iran and Israel could result in increased costs for Indian consumers, with potential increases in petrol and diesel prices, LPG and electricity bills, and transportation costs, causing additional financial burdens for middle-class families.
