The situation has suddenly become tense after US President Donald Trump announced the naval blockade in the Strait of Hormuz. This route is one of the most important oil supply routes in the world, so the impact of this step was immediately visible on the global markets. There was a decline in Asian stock markets and an atmosphere of fear was created among investors. As soon as the news of threat to supply came, the prices of crude oil increased. Prices crossed $100 per barrel and are expected to rise further. This clearly means that if this situation continues, then everything from petrol and diesel to everyday items can become expensive.
Banking and market expert Ajay Bagga said while talking to ANI that if the talks fail and the blockade is fully implemented, then the Strait of Hormuz will be almost closed. This will have a major impact on oil supply and will increase instability in the global market. He also warned that if the situation worsens, tensions may increase further, which will affect the entire world. At present huge fluctuations are being seen in the market. Big investors can make profits from this situation, but for common people this is a risky time. In a rapidly changing market, a wrong decision can cause losses, hence caution is necessary.
What will be the impact on India?
This crisis can be more serious for India, because the country imports most of the oil it needs. If prices rise, India’s import bill may increase rapidly. This will increase pressure on the government and will also affect the common people. The cost of oil affects every sector. Everything from transport to food items becomes expensive. This means that the danger of inflation increasing in the coming times is clearly visible.
According to the report of Times of India, the impact of this crisis is now visible on India’s external trade as well. About 20% of the country’s exports have been affected because there are problems in shipping via the Red Sea and the Gulf of Oman. This has also affected Indians working in Gulf countries. Out of about 1 crore Indians living there, about 9 lakh people have returned to India due to lack of jobs. Work opportunities have decreased especially in the construction and gig sectors. Because of this, the risk of reduction in money coming to India from abroad has increased, which can have the biggest impact on states like Kerala. If this stress does not end soon, its effects can last for a long time. Economic growth may slow down around the world and inflation may increase. This is the time for India to be cautious and take right decisions.
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