India has been hit by flight cancellations in the wake of rising oil prices, Iran conflict

New Delhi is feeling the heat as tensions in the Middle East show no signs of cooling, with high oil prices likely to increase the country’s already significant energy import bill, while airline operations are hampered by flight route disruptions.

India imports about 85% of its crude, equivalent to about 4.2 million barrels per day, Pankaj Srivastava, senior vice president at energy research firm Risted Energy, said, adding, “Even a few dollar price increase can materially affect (the country’s) energy economy.”

“Rising (oil) prices will weigh on the balance of payments and may put further pressure on the rupee,” he added.

Oil prices have increased after US and Israeli attacks on Iran 4th largest oil producer In OPEC – started over the weekend, putting the supply shock in focus. Ayatollah Ali Khamenei, the supreme leader of the Islamic Republic, was killed, prompting Tehran to launch attacks across the region and target countries in the Middle East, including US military bases.

Brent crude Prices hit a 52-week high on Monday, rising 9.3% to $79.40 a barrel.

Morgan Stanley said in a note on Sunday that every US$10/bbl rise in oil prices would directly hit Asia’s GDP growth by 20-30 (basis points), with India particularly vulnerable.

India’s current account deficit, which stands at 1.2% of its GDP, will widen by 50 basis points for every $10/bbl rise in oil prices, analysts said.

“Thailand, Korea, Taiwan and India will be more exposed to the downside of growth due to their vast oil and gas reserves,” the report said.

Oil traffic through the Strait of Hormuz has been disrupted by extremely high insurance rates due to Iran’s attacks on US bases in the Gulf, experts said. wiping Oil prices.

The Strait of Hormuz is a critical waterway that connects major energy producers – including Saudi Arabia, Iran, Iraq and the United Arab Emirates – to global markets and is responsible for about 20% of the world’s oil supply.

The latest ship tracking data suggests that half of India’s crude oil imports currently come through the Strait of Hormuz, global brokerage Nomura said in a report on Sunday.

“It’s a bad time for India,” Ellen Wald, president of Transversal Consulting, told CNBC.within India“Monday.” If India buys additional Russian oil cargoes, “India’s oil purchases will be under the microscope”, she added.

According to energy data provider Kpler, India imported 1.16 million barrels per day of Russian oil as of a week ago, below its average consumption of 1.71 million barrels per day in 2025. They were replacing this oil with supplies from the Middle East, which have now been disrupted.

Since August last year, Indian exports to the US have been subject to a 50% tariff, of which 25% is a punitive duty designed to discourage India from buying Russian oil.

Following an interim trade deal last month, the US removed punitive tariffs on India, stating that New Delhi would “commit directly or indirectly to stop importing oil from the Russian Federation” and buy “energy products from the United States”.

But Washington warned New Delhi that it would monitor India’s Russian oil imports and that any attempt to resume purchases could result in a renewal of punitive tariffs. Hence supply disruption due to Iran conflict becomes more problematic for India.

Despite the scrutiny, Wald said, “I don’t think anyone will blame them (India) for doing what they need to do to get through the next month.”

Srivastava of Rystad Energy said, “One possible scenario is that India resumes buying Russian oil as significant quantities of Russian crude of decent quality are already available on the water.”

Shares of Indian passenger airline IndiGo, which trades as Interglobe AviationMonday opened nearly 5% lower.

The company, which did not respond to CNBC’s request for comment, said in a Monday post that “temporarily Suspension “Selected international flights operating through parts of the Middle East airspace have been extended.”

Tata Group and Singapore Airlines-Owned Air India has canceled all flights to and from the UAE, Saudi Arabia, Israel and Qatar for Monday, a post on X said. It has also canceled some flights from New Delhi to Europe, but said many of its other flights to Europe and North America will operate accordingly. Schedule “Using Alternate Routes on Available Airspace.”

On Sunday, Trump told the Daily Mail newspaper that the conflict with Iran could continue for the next four weeks. Iran’s security chief Ali LarijaniMeanwhile, a post on X said Tehran has no plans to negotiate with the United States.

If the situation escalates, India may seek access from China to use its airspace from the north, allowing aircraft to fly into Europe from the Commonwealth of Independent States, Martin said.

A total of 350 flights were operated by Indian domestic carriers cancelled on Sunday, according to India’s aviation regulator.