Crude oil price increased by 4% due to Israel-Iran war: If oil prices continue to rise, Indian economy will be affected.

Crude oil price has increased by 4% after Iran’s missile attacks on Israel. Due to this, oil supply may be affected. Experts say that if oil prices continue to rise, it can become a big problem for the Indian economy.

The reason for this is that India fulfills most of its oil needs through imports. Israel has threatened to take revenge after Iran’s attacks. He has said that Iran will have to pay a heavy price for these attacks. In such a situation, crude may rise further.

Inflation increases in India due to increase in price of crude oil. According to experts, for every $10 increase in the price of crude oil, inflation in India increases by 0.3%. At the same time, Current Account Deficit (CAD) increases by 12.5 billion dollars. This is equal to about 43 basis points of GDP.

Purchasing power of people in India is also affected Due to cost of oil, purchasing power of people in India is also affected. The reason for this is that people have to spend more on transportation. Besides, this also increases the prices of goods and services.

Iran exports 17 lakh barrels of oil daily According to experts, due to oil becoming expensive, India will have to spend more dollars. This will weaken the rupee. Iran exports 17 lakh barrels of oil daily. He is a member of OPEC, the organization of oil producing countries.

Iran is located near the Strait of Hormuz, through which a large supply of oil passes. Big oil producing countries like Saudi Arabia, Qatar and UAE use this route to export oil.

OPEC countries’ share in world oil supply is 40% The share of OPEC countries in the world oil supply is about 40%. OPEC’s decision has a direct impact on oil prices. If oil prices remain high for a long time, it could create problems for many emerging countries like India.

Pressure is already visible on the economy in India There is already some pressure on the economy in India. Manufacturing PMI fell to an 8-month low in September. Current Account Deficit (CAD) has increased to 1.1% of GDP in the first quarter. In such a situation, increasing oil prices will increase the pressure on the economy.

India will have to pay higher prices for the import of essential commodities. India will have to spend more dollars if current account deficit increases. This means that the rupee will weaken. This will make imports expensive. Due to this, India will have to pay higher prices for the import of essential commodities.

Retail inflation reached close to 4% in August The share of fuel and light in retail inflation is 6.84%. This means that expensive oil can become the reason for increasing inflation in India. This will once again create a danger of inflation increasing, which has come close to 4% in August.