Oil Prices Soar 30% as India Exposed to Multiple Shocks

Oil prices have surged to $114 a barrel from below $85 in June and July. Leaving India vulnerable to a range of shocks as trade. Technology, and energy risks increasingly intersect, chief economic adviser V Anantha, Nageswaran said.

on Thursday.

Speaking at the SBI Banking and Economics Conclave. Nageswaran stated that India's imported crude basket had risen nearly 30% in September from August. With the price standing at $115.27 a barrel on September 22.

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noting that the effects on prices, capital, and trade end up amplifying each other, he said.

Nageswaran noted that supply shocks had become the dominant force shaping the global economy. With the pandemic, Ukraine war, trade restrictions, supply-chain disruptions, Persian Gulf conflict, and the AI investment boom adding to pressures on production and prices.

The worst shocks now arrive, not by accident, but by design, he said. What India needs is resilience, not just self-reliance, he added, suggesting the country should aim for diversified abundance.

As India's energy landscape continues to be shaped by shifting global dynamics, Nageswaran cautions that the country may soon find itself at the mercy of increasingly entrenched geopolitical blocs, which could precipitate higher energy costs and more frequent supply chain interruptions.

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noting that india, given its geography and its size, cannot obviously belong to any bloc, Nageswaran said. noting that that sovereignty or that independence comes with its own cost, and we have to be prepared to pay that price.

Energy prices could remain elevated even if the current conflict is resolved because of rising demand from AI-related infrastructure, he said. They added that the demand for energy from the AI model will continue to keep pressure on energy prices in general on the higher side going forward.

As global energy prices surge, nations are simultaneously intensifying their pursuit of investment, a coincidence that has raised eyebrows among economists.