Srinagar: The ongoing strife in the Red Sea has the potential to influence gold and petrol rates in Srinagar and other Indian cities, as Brent crude oil has recently reached USD 83.92 per barrel.
While the government has not hinted at any imminent increase in petrol or diesel rates, India, being the third-largest importer of oil, may feel the impact of the surge in crude oil prices globally.
Threats from increased freight costs
As India heavily relies on Russian supplies through the Red Sea, the ongoing conflict raises concerns about a potential increase in freight costs.
While the Houthis have not targeted Russian ships and cargoes, there is a chance of supplies being rerouted around the southern tip of Africa rather than taking the shortest route through the Suez Canal and the Red Sea.
However, it is unlikely that petrol and diesel rates in Srinagar and other cities in India will rise until the completion of the general elections.
Potential surge in gold rates
The ongoing conflict in the Red Sea may lead to an increase in gold rates in India. The potential rise is linked to the direct relationship between gold rates and crude oil prices.
In the past 10 days, gold rates in Srinagar and other cities have surged by over 0.6 percent. Presently, the rates for 10 grams of 24-carat and 22-carat gold stand at Rs 57,800 and Rs 63,050, respectively.
The impact of the ongoing conflict in the Red Sea on gold and petrol prices in Srinagar and other cities remains to be seen.