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Crude oil returns to $100, threatening India’s growth outlook

Brent futures are up more than 35% this month and can pressure India’s GDP growth if crude rises further, according to Motilal Oswal Financial Services.

Reported · Written up by our desk · Trade & Tariffs

Crude oil has climbed back to the $100 per barrel level, stoking concerns in India about slower economic momentum and a delayed stock market recovery. LiveMint Markets says the surge is linked to intensifying US and Iran hostilities, with oil prices also at risk of rising further if Middle East disruptions expand beyond key routes.

Brent crude futures have gained more than 35% this month, reclaiming the $102 per barrel mark, and reached a 52-week high of $126.41 on April 30 before easing to $70.14 on July 2 during US and Iran talks. LiveMint Markets also notes that multiple rounds of indirect talks failed and a ceasefire announced earlier collapsed.

Higher oil prices could hit India because it is the world’s third-largest crude importer and relies on imports for roughly 85% to 90% of total oil needs. LiveMint Markets says this can widen the current account deficit, complicate fiscal targets, pressure the currency, weigh on growth, and accelerate foreign capital outflows.

The outlet also cites Motilal Oswal Financial Services for an estimate that a $10 per barrel increase in crude could reduce India’s GDP growth by 30 to 40 basis points. It adds that higher fuel costs can raise inflation and push the central bank to raise rates or keep them elevated, while also squeezing corporate margins through higher manufacturing and transportation expenses.

Latest closeWTI crude $92.23 ▲6.2%|Brent $100.54 ▲6.9%

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