Written by: Akash Mandal3 min readMar 2, 2026 11:18 AM ISTIndian stock markets fell over 1% as the Israel-Iran conflict intensified. (Representative image)The Indian stock market opened sharply lower on Monday as prices of crude oil, a key commodity for a host of industries, surged on the back of the conflict between Israel and Iran developing into a full-blown war across West Asia. Other key Asian markets were also in the red.The National Stock Exchange’s (NSE) benchmark Nifty 50 index had opened the session over 2% lower and currently trades 296 points or 1.2% lower at 24,970.15 points at around 10:20 AM. The BSE’s 30-stock Sensex index is also 1.2% lower. All sectoral indices of the NSE are lower, with the Nifty Oil & Gas (down 1.5%) being the worst hit.Volatility surgeThe India VIX, which measures market volatility, surged nearly 7% to 16, the highest level since June 2025. It reflects market uncertainty as another geopolitical conflict develops, after being weighed down by multiple conflicts and trade-related concerns over the past year or so.The latest concerns come after Israel and its ally the US, launched airstrikes on Iran, killing its Supreme Leader Ayatollah Ali Khamenei in the process. Iran retaliated, hitting Israel and American bases across a host of nations in the Middle East, with the widespread nature of the conflict and collateral damage leading to the indefinite closure of Dubai’s airport, which was the busiest in the world. Proxies such as Lebanon-based Hezbollah also joined in, worsening tensions.Iran also tightened its grip on the Strait of Hormuz, a key waterway for international trade, adding to concerns. Most tankers, including those shipping crude oil and liquefied natural gas, have suspended shipments through the waterway. This led to crude oil prices surging 10% on Sunday and crossing the $73 per barrel mark, the highest levels since July 2025, with the 20% of global oil shipments transported through the key waterway. Many experts expect crude oil prices to climb over the $100 per barrel mark if the conflict stretches for a longer period.Also Read | Opec+ adjusts production, reaffirm commitment to market stability amid Iran tensionsShort-term impactCrude is among the most important input materials for industries, and is also India’s biggest import component. Every $1 increase in oil price is estimated to inflate the oil import bill by up to $2 billion on an annualised basis.Jefferies expects the conflict to have a short-term impact on the Indian market, with the Middle East responsible for 17% of India’s exports and 55% of India’s crude oil supply. However, India currently has a crude oil inventory of 3 weeks, providing a buffer for the time being, according to BofA. © The Indian Express Pvt Ltd