Open Dialogue by Axis Bank

This Isn’t Just About Oil: How the Conflict Impacts Growth, Inflation & Currency | Special Episode

17 snips
Mar 25, 2026
Guest
Neelkanth Mishra
Neelkanth Mishra, Chief Economist at Axis Bank and Head of Global Research at Axis Capital, offers macroeconomic analysis on energy shocks and balance-of-payments impacts. He explains why the Strait of Hormuz matters and how an energy shortfall ripples into GDP, supply chains, inflation, currency pressure and trade balances. The conversation also covers fertilizer and hidden input risks, inventory shifts, and timelines for disruption.
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INSIGHT

Strait Of Hormuz Threatens 7 Percent Of World Energy

  • A Strait of Hormuz disruption would cut about 7% of global energy supply and directly threaten GDP growth.
  • Neelkanth Mishra quantifies flows: ~105mbd global oil, ~20.9mbd through Hormuz and ~48mbd traded, making ~40% of traded oil transiting the strait.
INSIGHT

Small Input Shortages Can Halt Entire Value Chains

  • Second-order supply chain effects can exceed direct energy impacts, halting entire industries despite small input shortages.
  • Examples: auto paint guns needing LNG, tile factories in Morbi stopping construction and retail expansions stalling.
INSIGHT

High Oil Creates A Large One-Time Terms Of Trade Shock

  • Sustained $90–$100 oil for a year creates a roughly $80bn adverse terms-of-trade shock for India, about 2.1% of GDP.
  • That shock raises inflation ~0.9–1.3% and necessitates a currency adjustment to plug a $60bn balance shortfall.
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