In a recent op-ed in the Financial Times, headlined ‘The Gulf crisis may just be starting’, the paper’s well-known and highly regarded Chief Economics Commentator, Martin Wolf, analyses the impact of an aspect of the Gulf crisis that so far hasn’t got the attention it deserves i.e. the shortages and how their impact could get worse the longer they remain and the greater the physical damage done in the Gulf. He believes the real Gulf crisis may only just be starting. And he ends his Financial Times article with the following sentence: ‘The US called its war Operation Epic Fury. But Operation Epic Folly would have been a more realistic name’.

The Chief Economist of Axis Bank and a Member of the Prime Minister’s Economic Advisory Council says in his opinion the current account deficit and the falling rupee are the “most binding constraints” emerging out of the current Gulf crisis. Neelkanth Mishra also believes that the impact of the Gulf war and the oil crisis could be around 0.7%-08% of GDP growth. He says: “The sensitivity is that about $15 per barrel increase in oil price costs the economy about $40 billion or 1% of GDP. So if you take the average price of $70 a barrel of last year, if the oil price averages $85 a barrel, there’s a 1% of GDP impact. If it’s a $100 a barrel, it’s a 2% of GDP impact.”