economy
March 2, 2026
Why India looks especially vulnerable as conflict rages in Middle East
As conflict in the Middle East causes surging oil prices and disrupts the aviation sector, India is coming under pressure.
TL;DR
- High oil prices due to Middle East conflict are increasing India's energy import bill.
- Oil prices have soared after U.S. and Israeli strikes on Iran, a major oil producer.
- Brent crude prices hit a 52-week high of $79.40 a barrel.
- Rising oil prices will negatively impact Asia's GDP growth, with India being particularly vulnerable.
- India's current account deficit could widen by 50 basis points for every $10/bbl rise in oil price.
- Oil traffic through the Strait of Hormuz has halted due to high insurance rates, further inflating oil prices.
- Approximately half of India's crude oil imports transit through the Strait of Hormuz.
- India faces scrutiny over potential Russian oil purchases due to previous U.S. tariffs.
- Flight disruptions due to airspace closures over the Middle East are affecting travelers and airlines operating to and from India.
- Westbound flights from India are experiencing longer flight times and increased costs.
- Indian domestic carriers canceled 350 flights on Sunday due to airspace issues.
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