Question 1

Why are oil prices rising because of the Iran–Israel–US conflict?

Accepted Answer

The conflict has raised fears of disruption to the Strait of Hormuz — a narrow shipping corridor through which nearly 20% of global oil supply passes every day. Any threat to this route triggers an immediate spike in crude prices, as markets price in the risk of reduced supply. Brent Crude has already surged from around $70 to above $100 per barrel as a result.

Question 2

How does the Iran war affect LPG prices in India?

Accepted Answer

India imports more than 60% of its LPG consumption, much of it from the Middle East. The conflict has disrupted shipping routes, tightened global LPG availability, and increased import costs. This directly raises the cost of LPG cylinders for Indian households and businesses, and has led to localised supply constraints in several regions.

Question 3

What is the Strait of Hormuz and why does it matter to India?

Accepted Answer

The Strait of Hormuz is a narrow sea corridor connecting the Persian Gulf to the Arabian Sea. Nearly 20% of global oil and large volumes of LPG pass through it daily. India, which imports approximately 85% of its crude oil and over 60% of its LPG, relies heavily on this route. Any blockage or threat to the strait directly threatens India's energy supply and raises its import costs.

Question 4

What is India doing to manage rising oil and LPG prices?

Accepted Answer

India is deploying strategic petroleum reserves, diversifying crude oil imports from multiple supplier countries, strengthening LPG storage capacity, and accelerating investments in renewable energy and electric mobility. These steps aim to reduce vulnerability to future supply disruptions caused by geopolitical events.

Question 5

Will oil prices come down after the Iran–Israel–US conflict ends?

Accepted Answer

If diplomatic efforts succeed and shipping routes remain secure, global oil markets may gradually stabilise. However, structural changes may already be underway — countries are likely to diversify supply chains and increase renewable energy investment regardless of how quickly the immediate conflict is resolved.

Question 6

How does the Iran war affect the Indian rupee?

Accepted Answer

Higher crude oil prices increase India's import bill significantly, widening the current account deficit. This puts downward pressure on the rupee, as more dollars are needed to pay for imported oil and LPG. Inflationary pressure from rising fuel costs can further weaken investor confidence and the currency.