India's Fiscal Deficit at Risk from High Oil Prices, Geopolitical Tensions

The Finance Ministry of India has warned that high oil prices could strain the country's fiscal deficit and current account balance. The ministry made this statement in its July economic review, citing rising geopolitical tensions in the Gulf as a major concern.

Brent crude was trading at $89.74 a barrel, up 6.72%, while US West Texas Intermediate (WTI) crude rose 6.64% to $84.52 a barrel, reflecting concerns over supply disruptions amid tensions in the Middle East.

The ministry warned that sustained high crude oil prices could strain India's fiscal deficit and current account balance. It also stated that geopolitical tensions in the Gulf could push up commodity prices, disrupt global trade flows, and trigger volatile capital movements.