Exporters Warn that Escalating Conflict in West Asia Could Increase logistics Costs and Disrupt oil.

NEW DELHI: The escalating conflict in the West Asian region is likely to further raise logistics costs and negatively impact trade in key sectors such as oil, electronics, and agriculture, exporters have warned.

They also noted that insurance premiums for exports to the countries directly involved in the conflict could rise, affecting the working capital of Indian exporters.

The Global Trade Research Initiative (GTRI) has reported that the ongoing conflict is already impacting India’s trade with nations such as Israel, Jordan, and Lebanon.

The Federation of Indian Export Organisations (FIEO) has also highlighted the potential global trade and economic disruptions caused by the Iran-Israel conflict.

According to FIEO Director General Ajay Sahai, Iran plays a crucial role in the global oil market, and any escalation could disrupt oil supplies, driving up prices, which would affect economies dependent on oil imports.

Oil prices have already risen by $4 per barrel. Sahai also expressed concern that heightened tensions could destabilize the Middle East, particularly key trade routes like the Strait of Hormuz, through which a large share of the world’s oil is transported.