West Asia Conflict Raises Risks for Oil Supply, Freight Costs, and India's Trade

The escalating conflict between the US, Israel, and Iran has heightened tensions around the Strait of Hormuz, a critical maritime chokepoint through which about 20 million barrels of oil daily transit, including roughly half of India's crude imports. Shipping companies are rerouting vessels, and insurance and freight costs are rising, potentially disrupting global supply chains and increasing energy prices. India currently holds sufficient crude and fuel reserves to manage short-term disruptions and is exploring alternative suppliers, including Russia. However, prolonged conflict could raise import bills, inflation, and trade costs, impacting exports and key sectors like agriculture and energy. The Indian government and exporters are monitoring the situation closely and planning responses to mitigate economic risks.