Middle East crisis will affect India – former envoy
New Delhi’s dependence on oil shipped through the Hormuz Strait puts it in a tough situation, Dinkar Srivastava has told RT India
The Middle East crisis will affect India as its major supplies of oil and liquefied natural gas (LNG) are routed through the region, a former envoy to Iran has told RT India.
The US and Israel attacked Iran over the weekend, resulting in the death of Supreme Leader Ayatollah Ali Khamenei, triggering retaliatory strikes by the Islamic Republic and plunging the region into chaos.
“India has good relations with countries on both sides of the Gulf," Dinkar Srivastava, a former ambassador to Iran, told RT India. “Our foreign minister has already spoken to all concerned and asked the Israelis for de-escalation.”
Srivatsava said India has a 9 million-strong diaspora in the region. “About 50% of our oil supplies and 55% of our LNG come through this region,” he added.
Global oil prices jumped by as much as 13% on Monday following intense US-Israeli strikes on Iran, as tanker traffic through the Strait of Hormuz was heavily impacted.
“So we will be affected, as also the rest of the world, because oil and gas are fungible commodities. So an increase in prices in one place affects prices elsewhere,” Srivastava said.
Asked whether oil prices are set to peak like during the past crises, Srivastava said this was a distinct possibility.
“In 1979, there was a 10% reduction in oil supply due to the Iranian revolution. In case this war continues, the disruption will be much greater, because the Gulf region accounts for more than 20% of the global oil production and exports,” he said.
“This is coming at a time when Russian crude oil is under [Western] sanctions. So it will exacerbate the shortage,” the former envoy added.
Prices are therefore likely to rise significantly beyond the current level, he said.