Middle East volatility has exploded following joint US-Israel strikes on Iran, prompting Iranian missile retaliation against Israel and Gulf states like Qatar, Kuwait, Bahrain and UAE. With Supreme Leader Khamenei’s death fueling fears of prolonged conflict, global markets brace for turbulence, crude oil faces sharp war premiums, while safe-haven gold and silver gleam brighter. Commodity expert Ajay Kedia of Kedia Advisory warns of profound ripple effects on India’s import-dependent economy.
Oil prices poised for Monday surge
Experts forecast an 8% jump in MCX crude oil prices Monday due to war premiums, pushing March delivery from Friday’s โน6,100 close toward โน6,588. Internationally, WTI crude hovers at $67.02 (+2.78%), Brent at $72.84 (+2.78%), and Murban at $74.24 (+4.05%) per barrel as of recent trading. February already saw Brent rise 8%, and prolonged Israel-Iran clashes could propel prices 15% higher, to $80-100+ per barrel, threatening inflation worldwide.
Dire implications for India: 90 per cent oil import reliance
India imports 90% of its crude, half from Gulf nations, making it acutely vulnerable; Iran’s Strait of Hormuz closure, choking 20 per cent of global supply, looms catastrophic. Prolonged disruptions could strand supplies, hiking fuel costs and everyday goods, as crude feeds 6,000 products from petrol (70-80% usage) to plastics, polyester, syringes, cosmetics like lipstick, and asphalt.
Gold and Silver: Safe-haven surge amid chaos
Geopolitical flares drive investors from stocks to gold and silver, the ultimate “safe havens” that thrive on inflation and currency debasement. Kedia predicts 5% gold and 7-8% silver spikes on MCX Monday, fueled by US-Iran-Israel risks boosting demand. As equities wobble, these metals offer stability when war erodes trust in paper assets.
Broader economic fallout: Inflation Tsunami looms
Skyrocketing oil will inflate everything from diesel and LPG to jet fuel, synthetics, lubricants, and consumer staples, 90% of daily life touches petroleum derivatives. For India, this spells runaway inflation, strained trade balances and slowed growth, amplifying calls for diversified energy sources amid the Gulf powder keg.