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Morgan Stanley warns Iran US Israel tensions and higher oil may push Brent above 150, risking India inflation above RBI target, and wider current account gap.
Oil at $150? Morgan Stanley Sees Inflation Above 6%, Growth at 6.2%
The fresh escalation of Iran-US & Israel tensions has posed a risk of a further increase in oil prices to cross a record high of $150 per barrel. Morgan Stanley, in its latest report, has forewarned that if that happens, consumer inflation could slow to 5.7 per cent in FY27, with inflation rising above the Reserve Bank of India’s 6 per cent upper tolerance band.
The current account deficit could widen to about 3 per cent of GDP, Morgan Stanley said.
The brokerage has cut its base-case FY27 growth forecast for India to 6.2% from 6.5%, while raising its inflation outlook to 5.1%. This estimate is based on an assumption that Brent crude will average $95 per barrel. However, oil prices remained elevated on Tuesday, with Brent trading above $111 per barrel amid rising tensions around Iran and the Strait of Hormuz.
Crude oil surged 3.39% to 116.22, gaining 3.81 points, while Brent crude rose 1.45% to 111.37, up 1.60 points, reflecting continued strength in global oil prices amid rising geopolitical tensions.
Iran’s main crude export hub, Kharg Island, was hit by multiple strikes on Tuesday, according to Iranian news outlet Mehr. The island handles the bulk of the country’s oil exports. According to a report by Axios, which cited an unidentified senior US official, US conducted “strikes on military targets on Iran’s Kharg Island”.
The development came as the Israeli military said it had completed a broad wave of strikes targeting “infrastructure sites” across Iran, without specifying locations.
April 07, 2026, 5:44 PM IST
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