How long can the world & India absorb the US-Iran war oil shock?
The ongoing US-Iran conflict has created significant oil supply disruptions, though global prices have remained relatively stable due to emergency reserve releases. Experts warn that if the conflict persists, the global economy and India may face severe energy shocks as inventories deplete.
Why it matters
Energy security is a critical vulnerability for emerging economies like India, and prolonged geopolitical instability threatens global economic recovery.
The US-Iran war may have led the world to see one of the biggest oil supply disruptions in history but crude prices have largely seen a limited spike. But, for how long? The Middle East conflict is showing no signs of ending - the global oil market may have survived the first few months of the war relatively unscathed, but what if the war doesn’t end for another six months? For how long can the global economy, and India, survive an oil shock that may be snowballing slowly to possibly hit hard?In its August outlook on oil, US Energy Information Administration estimates that it will take until early 2027 for oil production and trade patterns to generally return to pre-conflict status.Not only that, EIA also believes that oil prices will continue to stay high for some time.
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