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India needs to keep a watch on financial volatility and bolster strategic oil reserves

The Middle East has been thrown into chaos in the wake of the US assassination of Iran’s Major Gen Qassem Soleimani, commander of the Quds special forces and the second-most powerful figure after Ayatollah Ali Khamenei. Iran’s vowed to retaliate, and rockets have already landed near the US Embassy in Baghdad. This conflagration could destabilise oil prices at a time when India’s economy is in fragile health. Meanwhile, with the US now an oil exporter, higher prices could help it narrow its trade deficit. India, a major Iranian oil buyer before US pressure forced a halt, purchases two-thirds of its crude from the Gulf, with Iraq the top supplier. Oil prices rose $3 right after the attack and Indian pump prices were hiked Monday. Gold prices have also hit six-year highs and the BSE slid by 800 points on Monday. ............................BL