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Personal Finance News

How Iran-Israel conflict may impact your finances: Gold, LPG, petrol, loans to investments

rajeev kumar
By Rajeev Kumar

5 min read | Updated on June 23, 2025, 14:17 IST

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SUMMARY

Households would be impacted if the fuel, including petrol, diesel, LPG, and CNG, prices rise due to the ongoing conflict. However, there is not much to worry about as of now.

personal finance in war

Any further escalation in Iran-Israel conflict is likely to impact your finances. | Representational image source: Shutterstock

While things appear to be in control for India amid the ongoing Iran-Israel conflict, any further escalation may impact the finances of households and investors in multiple ways.

This article analyses the possible impact of the conflict on some key issues related to your daily finances.

Impact on fuel prices: LPG, CNG, petrol, and diesel

Households would be impacted if the fuel, including petrol, diesel, LPG, and CNG, prices rise due to the ongoing conflict. However, there is not much to worry about as of now.

India currently buys 90% of its crude oil needs and 50% of its natural gas supply from other countries.

The crude oil is refined into petrol, diesel, and other byproducts, while natural gas is converted into CNG and used in vehicles as well as cooking gas in households. Natural gas is also used for generating electricity, producing fertilisers.

In the wake of the attack by the US on three Iranian nuclear sites, Iran is reported to have decided to shut down the Strait of Hormuz, which accounts for the flow of around 20% of the world's total oil and gas supply.
India’s daily crude oil import is around 5.5 million barrels per day (bpd). Out of this, around 2.2 million (bpd) of crude oil passes through the Strait of Hormuz.

The impact of any further escalation in the conflict could also be on the domestic liquefied petroleum gas (LPG) cylinder and Compressed Natural Gas (CNG) prices.

According to an ET report, around two of three LPG cylinders used in Indian households come from West Asian countries.

If Iran shuts down the Strait of Hormuz, India may face a jump in fuel prices. However, the country is likely to avoid any long-term disruption in fuel supply as there are multiple backup options, including imports from Russia, the US, and Brazil.

Oil Minister Hardeep Singh Puri has said the country has enough fuel supplies to meet requirements for several weeks. He has also said that India has diversified a large volume of fuel supplies, and a large volume of them do not pass through the Straight of Hormuz.
India's principal gas supplier is Qatar, which doesn't use the Strait of Hormuz to supply natural gas to India. India also imports gas from Australia, Russia, and the US, which do not depend on this chokepoint.

Impact on loans and borrowers

Further escalation may lead to a rise in fuel prices, which may in turn push inflation higher. However, if inflation rises, then the RBI may pause the current repo rate easing cycle or may even think of rolling back recent repo rate cuts. In such a situation, borrowers hoping for further rate cuts may be disappointed. Currently, most of the loans are linked to the RBI’s repo rate.
However, there is a need to wait and watch, as this is what the central bank is also doing with its recent change in stance from accommodative to neutral.

Impact on equity investors

Any conflict is bad for the economy and markets, and in turn, retail equity investors. Equity market investors may face further volatility if the Iran-Israel hostilities do not end soon.

The ongoing conflict has put the focus on companies engaged in various trades with Iran, Israel, and other West Asian countries. A further escalation in conflict is likely to impact companies engaged in oil marketing, aviation, petrochemicals, chemicals, paints, tyres, automobiles, and fertilisers.

A number of companies engaged in these businesses are part of major Indian indices. So the volatility in their stocks will not only have an impact of their shareholders but also those holding equity indirectly through various mutual funds.

On Monday, oil prices jumped to their highest since January. The ongoing conflict is expected to have a cascading effect on India's trade with West Asian countries. According to a PTI report, India's trade with Iran and Israel has already been impacted. Further escalation could risk exports to countries like Iraq, Jordan, Lebanon, Syria, and Yemen.

The conflict is also expected to impact Basmati rice traders, as Iran is one of the biggest buyers of Indian Basmati.

Impact on Gold prices

Data shows a rising trend in Gold prices in June 2025. The gold prices may go up further if the conflict escalates and more countries like the US get directly involved in the war.

However, the price of gold is likely to be impacted more by the US budget deficit than the ongoing Iran-Israel conflict, according to a recent note by the Bank of America.

Gold works as a hedge against uncertainties. And it mostly goes up in war-like situations. Therefore, one might see a further hike in the precious metal's prices if the conflict intensifies into a full-blown war.

On Monday, the price of 10 grams of 24-carat gold was ₹10,09,130, which is around ₹3000 higher than the price of ₹97,483 per 10 gram recorded on June 1, 2025.
Disclaimer: The views and opinions expressed above are those of respective experts/commentators and do not reflect the views of Upstox. This content is only for informational purposes and should not be considered investment advice from Upstox.
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About The Author

rajeev kumar
Rajeev Kumar is a Deputy Editor at Upstox, and covers personal finance stories. In over 11 years as a journalist, he has written over 2,000 articles on topics like income tax, mutual funds, credit cards, insurance, investing, savings, and pension. He has previously worked with organisations like 1% Club, The Financial Express, Zee Business and Hindustan Times.