Trump Effect: Oil prices jump. Is this a new headache for India?

Soon after the US forces killed Iran’s second most powerful person, General Soleiman, there started a rise in global oil prices today.  News headlines have started capturing the immediate fallout. 

What the headlines are screaming:

Bloomberg: Oil jumped close to $70 a barrel after a U.S. airstrike ordered by President Donald Trump killed a top Iranian general in Iraq.  

Wall Street Journal: Oil surged after the killing of an Iranian military leader in a U.S.-authorized strike. The escalation in tensions could threaten supplies.

TIME: U.S. equity futures fell and Asian stocks reversed earlier gains as the news broke.

What are commentators saying?:

Geopolitics will play out in different ways.  How are some important powers going to react?  Michael McFaul says, “China will never get involved in the conflict. Putin will condemn the US, praise Iran, and then do nothing, but hope quietly for conflict that weakens the US and raises the price of oil.”

What Iran does in the coming weeks and months will decide the extent to which oil prices might surge.  Jim Sciutto says, “An escalating conflict with Iran will be unlike any war the US has fought before. Iran and its proxies have regional and global capabilities to attack civilian and diplomatic targets, US soldiers, ships and aircraft, economic targets incl shipping, oil pipelines and facilities, plus cyber.”  

New headache for India:

With inflation rising, this is definitely something that warrants attention.  India doesn’t depend heavily on the direct import of crude oil from Iran.  But it is no consolation.  “A hike in the price of oil across the world affects ALL imports – no matter where the oil comes from,” says senior journalist Vikram Chandra.