Developments in Venezuela are unlikely to immediately impact India's oil supplies or prices, as Venezuelan crude has been largely absent from global markets due to US sanctions. While bilateral engagement has weakened, experts suggest India could diversify its sources if Venezuelan oil re-enters the market, potentially offering a sentimental impact on emerging market currencies.To begin with, the US-led sanctions on Venezuela have meant that oil flowing into the global markets, including India, has come dow ...

Geopolitical Risk & Oil Market Impact - The market perceives a 50/50 chance of US airstrikes on Iran's Fordo enrichment facility, potentially escalating regional conflict [3] - US intervention could prompt Iran to deploy short-range missiles against regional facilities in the Gulf and attack ships, mirroring the 2019 playbook [4][5] - Iran's 2019 actions, including targeting tankers and Saudi Arabia's Abqaiq facility (taking off half of Saudi Arabia's production temporarily), serve as a warning [5] - If Iran perceives an existential threat, it may disregard China's concerns and curtail energy supplies, prioritizing imposing costs on the US [9][10] Potential for Sustained Oil Price Spike - Major Middle East conflicts have historically caused multi-month or year-long disruptions of over 1 million barrels per day [13] - Iranian-backed militias in Iraq pose a risk to Iraq's energy facilities, which produce around 4 million barrels per day [14] - Despite the US Fifth Fleet's presence, Iran could mine the Straits of Hormuz or target oil tankers, disrupting oil transit [14][15] - Reports indicate Iran is aggressively jamming ship transponders, with Qatar Energy and the Greek shipping authority issuing warnings about traversing the Straits of Hormuz [15] Economic Consequences - Higher oil prices would negatively impact the US consumer and hinder President Trump's efforts to reduce inflation [8]