MUMBAI: A surge in crude oil prices threatens to stoke inflation, derail earnings growth of companies, and hurt India’s economy in the year ahead.
As the world’s third largest importer of oil, India is among the most vulnerable to rising energy costs. It imports more than 80% of its oil requirements. With Brent crude at a six-month high, it poses a clear risk to India’s fiscal health. Inflationary pressures may also prompt the Reserve Bank of India (RBI) to rethink the pace of interest cuts.
Last week, Brent crude oil rose above $75 per barrel for the first time in 2019 in the wake of tighter sanctions on Iran. The US said it would end all exemptions for sanctions against Iran, demanding countries halt oil imports from Tehran from May or face punitive action from Washington.
