West Asia Tensions: India imports approximately 5 million barrels of crude oil daily. Assuming an average increase of $10 per barrel, India would be paying an additional $10 per 5 million barrels daily.

India is suffering huge losses daily due to tension in the Middle East.

Iran War: The economic impact of rising tensions in the Middle East is being felt widely in India. The conflict with Iran is impacting India in two ways: a surge in crude oil prices and a decline in the rupee against the dollar. According to estimates, in just four days, India has incurred an additional burden of over ₹1,840 crore. Let's understand the daily losses and their impact, and what experts are saying.

How much damage does oil cause in 4 days?

India imports approximately 5 million barrels of crude oil daily. Assuming an average increase of $10 per barrel, India is paying an additional $10 per 5 million barrels daily. This translates to a total additional expense of $50 million per day. If the dollar is valued at 91 rupees, this translates to an additional expense of approximately 455 crore rupees per day. Consequently, the increase in oil prices in just four days has resulted in an additional burden of approximately 1,820 crore rupees.

How much will the rupee depreciate?

Additionally, the depreciating rupee is also having an impact. India's annual oil import bill is approximately $160 billion. If the rupee weakens by one rupee against the dollar, it translates to an additional burden of approximately ₹16,000 crore annually. This translates to a four-day impact of approximately ₹44 crore per day and approximately ₹175 to ₹180 crore over four days.

What do experts say?

Thus, the combined increase in oil prices and the weakening of the rupee brings the total additional burden to approximately ₹2,000 crore over four days. Retired JNU professor Shivaji Sarkar argues that import-dependent countries like India are bearing the direct economic brunt of the ongoing conflict between Iran, Israel, and the United States. According to him, increased uncertainty in sea and air routes is impacting cargo movement, which could impact both oil imports and exports.

India relies heavily on imports for its energy needs, so a protracted conflict could pose challenges to inflation, supply chains, and government finances. If this tension persists, India will need to place greater emphasis on alternative supply sources, strategic reserves, and currency stability to limit economic damage.