Looming oil risk

Volatility in crude oil markets threatens macro stability

Volatility in global crude oil markets has always been bad news for India. On Friday, the first deputy managing director of the International Monetary Fund, Gita Gopinath, warned there was the risk of a “severe oil shock”. The backdrop for her warning is heightened tensions in West Asia. Israel’s war in Gaza smoulders on; the worst-case scenario, a broader conflict that renders it impossible for crude oil exports to be fulfilled, seemed more likely for part of last week as Israel and Iran exchanged missile salvoes. The immediate danger seemed to be avoided when Iranian state media downplayed the effects