5 Ways The Israel Iran War Could Impact Your Wallet In India
Israel-Iran war is happening thousands of kilometres away from India. But its impact is still reaching us ever since the war began in late February 2026.
But how?
Here are 5 significant ways in which the Israel-Iran war can impact the pocket of every Indian:
1. LPG Cylinder Prices
India has been importing around 60% of its LPG needs, out of which 80-90% has been from the Middle East1.
Naturally, if tensions in the region continue to disrupt supply routes like the Strait of Hormuz, global energy prices will keep on rising. That’s a key reason why LPG cylinder prices have begun increasing in India2.
And for millions of households, this directly means higher monthly expenses.
2. Costlier Flight Tickets
This too has started happening already. With crude oil prices jumping up to 30% ever since this war started, airlines have begun raising their fares, since their jet fuel relies heavily on crude oil3.
That’s why flight fares in India have already started rising on several routes.
3. Rupee Depreciation
Rupee has already depreciated below the 92 per dollar mark since the Iran-Israel war began in late February this year4.
But why is that happening? You see, India imports more than 85% of its crude oil, and much of it comes from the Middle East.
And with oil prices rising due to supply disruptions through the Strait of Hormuz, India has to spend more dollars to import crude.
This increases demand for dollars and puts pressure on the Rupee.
And when the Rupee weakens, imported goods like electronics, fuel and machinery become more expensive in India, and so are your travel or transactions abroad.
4. Petrol And Diesel Prices
Besides LPG, India’s petrol and diesel prices too are closely linked to global crude oil prices.
And with crude oil prices already surging upto 30%, petrol and diesel prices could soon come under pressure (although it hasn’t happened yet), especially if oil prices continue to stay high for a longer period.
5. Cost Of Daily Essentials
Higher oil prices don’t just impact LPG and fuel prices.
They even increase the cost of transportation, farming, fertilisers, and logistics across the economy. Even industries like paint, textile, steel may be impacted too.
For example, trucks transporting vegetables, grains, and other goods have to spend more on fuel, farmers may face higher costs for running tractors and irrigation pumps. Even the fertilisers are closely linked to energy prices, as they are often made using natural gas and petroleum-based inputs.
Over time, all these higher costs get passed on to consumers- which means groceries, food items and other daily essentials become more expensive.
This comes amid earlier political unrest in Iran that also affected oil markets. You can read more about it here.
Conclusion
By now you must have understood that geopolitical conflicts are not just news for you, they in fact affect every one of us, sooner or later.
Even as a nation, India’s current account deficit could see an immediate impact from this oil crisis. With Rupee already hitting all time low multiple times since this war began in late February 2026, India’s central bank, the RBI, has been selling US Dollars from its reserves.
At the current price of around $100 a barrel for crude oil would lead to widening of India’s current account ?deficit to 1.9%-2.2% of GDP for the 2026-27 financial year, which is much higher than the projected 0.7%-0.8% of GDP, as per rating agency ICRA.
FAQs
1. How does the Israel-Iran war affect oil prices globally?
Conflicts in the Middle East can disrupt major oil supply routes like the Strait of Hormuz. This uncertainty reduces supply expectations and pushes global crude oil prices higher.
2. Why can LPG cylinder prices increase in India during an oil crisis?
India imports a large share of its LPG from the Middle East. When global energy prices rise due to geopolitical tensions, LPG import costs increase, which can lead to higher cylinder prices.
3. How do rising oil prices affect flight ticket prices?
Airlines rely on aviation turbine fuel (ATF), which is derived from crude oil. When crude prices rise, airline operating costs increase, and this often results in higher ticket fares.
4. Can oil price shocks affect everyday expenses in India?
Yes. Higher oil prices increase transportation, logistics, and production costs. Over time, these higher costs can push up prices of groceries, goods, and other daily essentials.
References:
1. BBC, accessed from: https://www.bbc.com/news/articles/cm2xg0p4y84o
2. Indian Express, accessed from: https://indianexpress.com/article/india/domestic-lpg-cylinder-price-hike-rs60-west-asia-crisis-delhi-full-list-10569072/
3. ET, accessed from: https://economictimes.indiatimes.com/wealth/save/costly-flight-tickets-from-march-12-2026-how-air-indias-fuel-surcharge-on-domestic-international-flights-will-make-you-pay-more/articleshow/129451846.cms?from=mdr
4. Reuters, accessed from: https://www.reuters.com/world/india/indian-rupee-hits-record-low-investors-fret-energy-supply-risks-2026-03-13/
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