Though the armed flare-up between the two countries confirmed what the world had feared ever since US President Donald Trump walked away from the US-Iran nuclear deal in May 2018, the rising hostility has not yet affected the overall oil production or supply of crude oil, which shot up by about $10 per barrel since the US forces based in Iraq killed Soleimani in a drone attack.
The shortfall in oil supply due to tension and instability in West Asia is not a major issue for India as this can be met by enhanced supplies from other oil-producing regions. What is worrying for countries like India that depend almost entirely on imports for all its oil needs is that the oil prices can go up and stay in the higher region. This can seriously impact the fiscal deficit and the consumer price index in the medium and long terms.
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