He said the killing of Iran’s top leadership has hurt public opinion across the Shia world. “It has lacerated public opinion there, and it’s not going to die down,” he said.
Sibal noted that Iran had warned of retaliation if attacked, adding that both the US and Israel were prepared for a response.He warned that India faces serious exposure. Around 9 million Indians live in the Gulf. Nearly 40% of India’s remittances and about 48% of its energy imports come from the region.
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Iman Nasseri, Managing Director for Middle East research at FGE NexantECA, said the war has become “more of an existential battle between the two sides.”
He said Iran may not be able to win militarily but can raise costs by targeting infrastructure. Recent attacks have hit the port of Fujairah in the UAE and energy facilities linked to Saudi Aramco and QatarEnergy.
Brent crude has risen to around $85 per barrel. Nasseri said oil markets can be stabilised if the US and other Organisation for Economic Co-operation and Development (OECD) countries release emergency reserves. However, he cautioned that gas and liquified petroleum gas (LPG) are harder to replace.
There are also concerns over the Strait of Hormuz. Insurance costs for ships have risen, and some cargo movements have slowed. Iraq, a key supplier to India, ships much of its crude through this route.
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Sibal questioned whether the stated objective of eliminating Iran’s nuclear capability justifies the scale of action. He pointed out that Iran had agreed to restrictions under the 2015 nuclear deal before the US withdrew.
He warned that if Iran exits the Nuclear Non-Proliferation Treaty (NPT), inspections would stop, creating a larger problem.
He also said regime change efforts in the region have led to instability in the past and could worsen the humanitarian situation.
India has strong ties with the US and Israel, but it also depends heavily on Gulf countries for energy, remittances, and investment. Trade agreements and investment plans with the UAE and the Gulf Cooperation Council (GCC) could face uncertainty if the conflict continues.
Energy markets remain the immediate concern. If the Strait of Hormuz stays disrupted for a long period, oil and gas prices could rise further, affecting inflation and growth in India.
