Rising tensions between the US and Iran has led to crude oil prices soaring and were trading 4% higher on Friday.
Brent Crude Oil rallied 4.3 per cent to $69.14, while WTI jumped 4.3 per cent to $63.84 per barrel. Analysts see a further rally in pries in the coming days.
According to reports Iran's top commander General Qassim Soleimani has been killed in a U.S. drone strike in Baghdad, on Thursday night following reports of his death on Iranian state television and Iraqi media.
An escalation began following a New Year's Eve attack by Iran-backed militias on the U.S. Embassy in Baghdad.
In India, petrol and diesel prices are linked to global crude prices, which should put pressure on the fuel.
Petrol prices have already gained as much as Rs 6 in 2019 and are already up in the first two days of 2020. In the last fortnight the fuel price is up almost 60 paise and is set to rise even further. Mounting fuel prices are not good for the Indian economy and could worsen economic conditions.
India has been plagued with dwindling economic growth and slightly elevated inflation - a condition that is not good. Rising fuel prices could worsen inflation data and hence a reduction in interest rates.