3 min readMar 20, 2026 06:00 AM IST First published on: Mar 20, 2026 at 06:00 AM ISTWith the targeting of key energy infrastructure, the conflict in West Asia is now spreading far beyond the region. Israel has struck Iran’s South Pars natural gas field, which is estimated to account for a significant share of the country’s gas production. In response, Iran has fired at the Ras Laffan Industrial City in Qatar — the world’s largest gas hub. With energy infrastructure now being specifically attacked — Saudi Arabia’s SAMREF refinery as well as a refinery in Kuwait are also reported to have been hit — it raises the risks of prolonged disruptions in supplies, further straining global energy markets. The ripple effects will be felt across the world.Prompted, perhaps, by the damaging consequences for the global economy of this dramatic move up the escalation ladder, President Donald Trump has sought to distance the US from this attack. Placing the blame squarely on Israel, Trump posted on a social media platform that the US “knew nothing about this particular attack”. And that “NO MORE ATTACKS WILL BE MADE BY ISRAEL pertaining to this extremely important and valuable South Pars Field unless Iran unwisely decides to attack”. Brent crude oil crossed $110 per barrel during early trading. Stock markets the world over were in the red. Price pressures are already evident across economies. In the US, gasoline prices have surged to $3.884 per gallon, up almost $1 from a month ago, while in Europe, natural gas prices have soared following the recent attacks.AdvertisementDisruptions in the supply of oil and gas and higher energy prices sustained over a long period will cause considerable pain. India will be no exception. The average price of India’s crude oil basket in March is currently $114.08 per barrel, up from $69 in February. India also has 22 vessels stuck in the Persian Gulf that hold 3.2 lakh tonnes of LPG, 2 lakh tonnes of LNG and 16 lakh tonnes of crude oil, as per a report in this paper. The chief economic advisor, V Anantha Nageswaran, reportedly told the Standing Committee on Finance that the impact of crude at $90 is “almost insignificant or not relevant”. However, if crude rises to $130 per barrel and sustains at that level for two to three quarters, then growth would fall to 6.4 per cent, inflation would rise to 5.5 per cent, the fiscal deficit would grow to 5.6 per cent of GDP and the current account deficit would widen to 3.2 per cent. Macroeconomic management could then become far more challenging.