Trade To Oil Prices — Middle East Crisis Prompts PM Modi To Convene Urgent Cabinet Panel Meet: Details

Amidst escalating Middle East tensions, India's Cabinet Committee on Security discussed the conflict's impact on trade and supply chains.

Cabinet Committee on Security comprises the Prime Minister, the Home Minister, the Defence Minister, the Foreign Minister, the Finance Minister and the National Security Adviser (File Image: X)

Source : twitter

Amid the escalation of war in the Middle East, Prime Minister Narendra Modi on Thursday called an urgent meeting of the Cabinet Committee on Security to discuss the outbreak of fresh hostilities in West Asia. The government's topmost decision-making body reportedly discussed the impact of the conflict on international trade and supply chains.

"The West Asia conflict and its impact on trade and supply of petroleum products was discussed in the meeting," news agency PTI reported quoting sources.

India has also voiced 'deep concern' over the escalation of the security situation in the Middle East and said the conflict must not take a wider regional dimension. New Delhi has also called for addressing all issues through dialogue and diplomacy.

Impact of West Asia Conflict On Trade And Supply Chain

With the sharp escalation between Iran and Israel, wider disruptions of trade and supply chain are expected across the key Red Sea and Gulf of Aden routes, affecting petroleum and commodity prices across the world. Amid the conflict, the cargo freight tariffs are likely to go higher as Lebanon's Iran-backed Hezbollah has close ties with the Houthi rebels in Yemen. Houthis are behind most attacks on merchant ships and vessels carrying cargo via the Red Sea and Gulf of Aden routes.

On Thursday, oil prices strengthened with investors concerned that a widening Middle East conflict could pose a threat to crude oil flows from the region. As per a report by Reuters, Brent crude futures were up USD 2.82, or 3.82 per cent, at USD 76.72 a barrel by 11:36 a.m. EDT. Market fears are mounting over the possibility that Israel might target Iranian oil infrastructure, raising the spectre of retaliation from Iran.

India also trades heavily with the Gulf nations. As per the latest government data, the Gulf Cooperation Council or GCC now contributes 15 per cent of India's total trade.