Amitendu Palit
The political uncertainty in the Gulf has generated new economic challenges for India. Global oil prices are rising fast following the attacks by the United States (US) and Israel on Iran, and retaliatory strikes by Iran on US energy assets in the Middle East. The developments occur at a time when global energy supplies outstrip demand. Nevertheless, oil prices are rising from deep ruptures in energy supply chains.
The foremost underlying cause behind the rupture is lack of security for energy traffic in the Strait of Hormuz. The narrow waterway between Iran and Oman is the main conduit for the export of oil and gas from the Gulf to the rest of the world. Traffic in the Strait of Hormuz has ground to a halt with tankers fearing attack. Qatar has stopped supplying liquified natural gas (LNG) through the Strait of Hormuz. For India, the challenge of tackling rising crude oil prices is amplified by lack of LNG imports from Qatar that has implications for a substantial number of vehicles running on compressed natural gas.
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