By Admin 
Jefferies Report Middle East Conflict Impact: The direct impact of the ongoing dispute in the Middle East is visible on the Indian market. On Monday’s trading day, both the major benchmark indices BSE Sensex and Nifty 50 closed trading in the red. Talking about trade figures, India’s exports with West Asia are about 75 billion dollars. Also, a large number of Indian workers live in the Middle East and send a large amount of money every month to their families in India.
The Iranian government has decided to close the Strait of Hormuz. Meanwhile, global brokerage firm Jefferies has released a report “Middle East Conflict – Impact Likely to Be Short-Term”. In which the firm has explained in detail about its impact on various sectors. Let us know about this….
What will be the impact on the oil market?
According to the firm, due to this instability arising at the global level, Indian oil marketing companies are going to be affected the most. Companies like BPCL, HPCL and IOCL may have to suffer losses.
The firm said that if the price of crude oil goes above $ 80 per barrel, the government will have to take a decision to increase retail fuel prices or may have to reduce excise duty. Both these options can be difficult for the government. If prices increase then common people will have to bear the brunt of inflation.
Middle East tension has double impact on aviation companies
According to brokerage firm Jefferies, the current situation on the aviation sector can be affected from two sides. The report says that 35-40 percent of IndiGo’s international capacity is dependent on Middle East routes. Which is about 10-12 percent of its total capacity. If travel or airspace is affected due to regional tensions, passenger demand on these routes may decline.
On the other hand, due to increase in the price of crude oil, Aviation Turbine Fuel (ATF) becomes expensive. Due to decrease in demand and increase in fuel cost, the profit margin of the company may decrease.
Middle East related companies may suffer losses
The brokerage firm says that this tension may cause loss to those Indian companies which depend on the Middle East for their income. For example, 25 percent of the total revenue of Larsen & Toubro (L&T) company comes from the Middle East. L&T is expected to suffer huge losses due to this ongoing dispute.
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