'India is vulnerable to energy shock': $50 crude jump means $90 billion hit, warns economist Neelkanth Mishra
Oil prices surged earlier in the day as the conflict intensified and threatened production and shipping across the Middle East
- Mar 9, 2026,
- Updated Mar 9, 2026 8:18 PM IST
India is deeply vulnerable to rising global energy prices, Neelkanth Mishra, Chief Economist at Axis Bank, said on Monday. He said India imports 50% of its dense energy, whether it is in the form of oil, gas, fertilizer - "all of that exposure is very vulnerable at this stage."
Also read: Government moves to curb hoarding as LPG demand spikes; booking gap raised to 25 days
Even small moves in crude prices translate into large changes in India's import bill, the economist warned. "Every dollar per barrel is about 1.8 billion a year. If there is a $50 increase in oil prices, we are talking about $90 billion of impact."
Also read: Impact of rising crude oil prices on inflation not seen to be substantial at this point
Such an increase could have macroeconomic consequences if sustained, Mishra added. "That is more than 2% of GDP if oil prices stay here for one year. That means a significant distortion in the balance of payments."
Oil prices surged earlier in the day as the conflict intensified and threatened production and shipping across the Middle East. Brent crude climbed as high as $119.50 per barrel before easing to around $107.80, while U.S. benchmark West Texas Intermediate briefly touched $119.48 before falling back to about $103.
Markets steadied after the Financial Times reported that some Group of Seven countries were considering releasing strategic petroleum reserves to ease supply pressures.
For India, Mishra said the economic impact will depend largely on how long elevated prices persist. "It is a $50 rise for now. As stress builds up, this number can go higher from here in the short term. The question is whether this would last a year or a month," he said, adding that higher prices would affect not just India but multiple economies involved in the conflict.
"It is not just painful for India but for everyone, including the ones involved in the battle. It is as much a problem for the West Asian oil producers as it is for America, where mid-term elections are due later this year," the economist said.
He said geopolitical incentives could limit the duration of the conflict. "It is reasonable to expect that this will be a short-lived war, because it is not in China's interest and America's interest," Mishra said, describing the confrontation as "the game of brinkmanship" that could play out for "another 4-6 weeks."
The economist said that it was reasonable to expect "that by the end of April, we will see some kind of conclusion."
India is deeply vulnerable to rising global energy prices, Neelkanth Mishra, Chief Economist at Axis Bank, said on Monday. He said India imports 50% of its dense energy, whether it is in the form of oil, gas, fertilizer - "all of that exposure is very vulnerable at this stage."
Also read: Government moves to curb hoarding as LPG demand spikes; booking gap raised to 25 days
Even small moves in crude prices translate into large changes in India's import bill, the economist warned. "Every dollar per barrel is about 1.8 billion a year. If there is a $50 increase in oil prices, we are talking about $90 billion of impact."
Also read: Impact of rising crude oil prices on inflation not seen to be substantial at this point
Such an increase could have macroeconomic consequences if sustained, Mishra added. "That is more than 2% of GDP if oil prices stay here for one year. That means a significant distortion in the balance of payments."
Oil prices surged earlier in the day as the conflict intensified and threatened production and shipping across the Middle East. Brent crude climbed as high as $119.50 per barrel before easing to around $107.80, while U.S. benchmark West Texas Intermediate briefly touched $119.48 before falling back to about $103.
Markets steadied after the Financial Times reported that some Group of Seven countries were considering releasing strategic petroleum reserves to ease supply pressures.
For India, Mishra said the economic impact will depend largely on how long elevated prices persist. "It is a $50 rise for now. As stress builds up, this number can go higher from here in the short term. The question is whether this would last a year or a month," he said, adding that higher prices would affect not just India but multiple economies involved in the conflict.
"It is not just painful for India but for everyone, including the ones involved in the battle. It is as much a problem for the West Asian oil producers as it is for America, where mid-term elections are due later this year," the economist said.
He said geopolitical incentives could limit the duration of the conflict. "It is reasonable to expect that this will be a short-lived war, because it is not in China's interest and America's interest," Mishra said, describing the confrontation as "the game of brinkmanship" that could play out for "another 4-6 weeks."
The economist said that it was reasonable to expect "that by the end of April, we will see some kind of conclusion."