Resilient Indian economy needs no urgent action on crude price rally, says govt official

Investors are worried about an Israeli strike on Iranian oil refining assets.

India has stayed unmoved even as the deepening political crisis in the Middle East set crude oil prices simmering. The firm stand of the government indicates no need for any immediate intervention, a senior government official said, reaffirming the underlying strength of the economy to face such fluctuations.

"Global uncertainties have impacted crude oil. India has seen crude at higher levels than this. No urgent measures are required as of now," the official said on October 4, refusing to be identified. "We need to closely watch the geopolitical developments. The Indian economy is resilient to overcome geopolitical tensions. Need not worry, keep building resilience,” the official reiterated.

Oil markets around the world saw how the prices rallied fuelled by the fears of a broader conflict in the Middle East as Israel and Iran inched towards full-scale warfare. Brent crude prices shot up after Iran launched a second direct missile attack on Israel this year. The markets were discounting an all-out war between Iran and Israel until Tehran launched heavy airstrike earlier this week and Tel Aviv warned of fitting retaliation.

Brent crude hovered on $78 a barrel in early trade on October 4, clocking its biggest one-day rise in almost a year after President Joe Biden told reporters that the US was discussing whether to support potential Israeli strikes against Iranian oil facilities.

Investors are worried about an Israeli strike on Iranian oil refining assets, which may evoke further retaliation and escalate the ongoing conflict.