DC Edit | Reject US Spin on Oil Purchase

United States President Donald Trump’s nonchalant reaction to the prospect of rising global crude oil prices hints at the prospects of turmoil in the global energy market, if the US-Iran war does not end quickly.

West Asian oil is crucial for the global energy market for it meets nearly 25 per cent of the global oil demand. According to an estimate, if the Strait of Hormuz were to remain closed for more than a few weeks, the price of oil could double or triple as countries would bid higher for securing the limited supplies available in the market.

Mr Trump promised that the US Navy will escort oil ships from the Strait. However, in such a scenario, Iran would force all its firepower to target oil wells as part of its strategy to exert pressure on Arab nations to convince him to stop the war. But the Trump administration may not like to return home ahead of Congressional elections as a loser, laying ground for entrenched hostilities.

As every one dollar rise in crude oil increases India's annual import bill by around $2 billion, a $20 rise in crude oil price would increase import bill by $40 billion. West Asia is also a major source of foreign remittances to India. A troubled West Asia coupled with higher oil prices will push the rupee to new lows.

A 30-day waiver granted by the United States to India for buying Russian crude oil in the wake of the Iranian blockade of Strait of Hormuz will calm down panic among people about fuel shortage. However, if a sovereign country like India were to seek permission for what it buys and from whom it buys, it would be utterly humiliating. It sounds like Mr Trump has demoted India to a vassal state’s status. The Narendra Modi government must stoutly reject such announcements.