New Delhi : Global crude oil prices could reach around USD 120 per barrel if the conflict in West Asia continues for an extended period, warned Manoranjan Sharma, Chief Economist at Infomerics Ratings, highlighting the potential disruption to global economic projections.
Speaking to ANI, Sharma noted that oil prices have already surged sharply in a short span. “Before the conflict, crude oil was below USD 70 per barrel, but it has now risen to around USD 90,” he said.
He added that if tensions involving the United States, Israel, and Iran persist, prices could climb further. Earlier expectations suggested the conflict might ease within weeks, but the situation now appears increasingly uncertain. “If oil prices reach USD 100 or even USD 120, several economic forecasts will need significant revision,” Sharma explained.
Sharma emphasized that India’s budget and Reserve Bank assumptions were based on oil at around USD 70 or lower, meaning a sustained spike would force policymakers to revisit their estimates. While India’s GDP growth may be cushioned by strong domestic demand, higher oil prices are likely to worsen the country’s trade deficit, current account deficit, and fiscal deficit.
Historically, he said, a USD 10 rise in crude adds roughly 0.2–0.4 percentage points to CPI inflation. Continued tensions could also trigger capital outflows from emerging markets, financial market volatility, and supply chain disruptions affecting countries like India.
Recalling past trends, Sharma noted crude once surged to USD 145–147 per barrel over a decade ago amid geopolitical uncertainty. While he hopes such extremes do not return, he cautioned that oil reaching USD 120 per barrel cannot be ruled out if the conflict intensifies or drags on.