Deepak Shenoy, the CEO of Capitalmind Mutual Fund, has shared his views on the ongoing tensions involving, the Unites States, Israel, and Iran, weighing in on the potential market and trade implications of the escalating conflict.
Tensions between the US and Iran increased on Saturday, with the launch of ‘Operation Epic Fury’. Israel first announced the strikes, with US President Donald Trump later confirming Washington’s role.
Speaking about the objective of the strikes, Shenoy said that it appears to remain the the elimination of Iran’s missile and nuclear capabilities.
“I believe Iran will get defensive anti-missile support from Russia and/or China, for protection,” he said, adding that years of oil revenues have significantly strengthened the country’s military infrastructure.
Shenoy further cautioned that given the scale of the military build-up, the situation may not be resolved quickly and could persist for an extended period. Here’s what he said about the conflict’s impact on stock markets and economy.
Will oil imports be hit? Here’s what it means for India
Shenoy predicted that crude oil prices could surge, as shipping oil through the Strait of Hormuz is out, it would force ships to take longer routes around Africa. He said such a development would be particularly challenging for India, given that oil is the country’s largest import. His remarks came after Dubai, and other Middle East regions were attacked by Iran as a retaliation on Saturday, according to multiple report.
He cited data that shows India imported only about $113 million worth of oil-based products from Iran between April-Dec 2025, which is a negligible share of overall energy imports. According to Shenoy, this relatively small exposure means India can easily re-route the sources.
How will the conflict affect inflation?
He also said Inflation could rise due to the heightened geopolitical tensions, especially if retail fuel prices in India are increased. “There is however scope to keep those prices constant for a while,” Shenoy said.
“OIL/ONGC had some gas discoveries off Andaman last year, and I hope they accelerate their drilling to get a little less dependent on foreign sources,” Shenoy said in the X post.
Speaking about the inflation in the United States, he noted that if crude oil spikes, then it will spook markets eventually.
Will markets crash?
Addressing whether stock markets could crash, Shenoy said that previous geopolitical events, including tensions involving India-Pakistan, have not typically resulted in the markets crashing. “Maybe this one will, who knows, but still: don’t expect markets to react whichever way you think they will react.”
He added that one sector that could regain investor interest is defence manufacturing, which may benefit from increased global security spending, though he did not identify any other clearly visible immediate market impact from the current situation.
“I’ll end with this. All war is bad. It is difficult to admit that we are economic vultures, trying to find money making measures, when people will die for ill-formed reasons. I hate this part about my job. So I’ll leave it there, and keep my distaste controlled, while we figure out how to navigate this “geopolitical” event,” he said to conclude his lengthy post.
