Potential US-Iran Deal Could Reshape Global Energy Markets

A potential agreement between Iran and the United States could end the West Asian conflict, normalize global energy markets, and ease macroeconomic pressures on India, according to Kotak Institutional Equities. The resolution is expected to lower oil prices, benefiting India's fiscal position and corporate earnings, but risks remain from weak monsoons.

A potential accord between Iran and the United States may soon bring an end to the ongoing West Asian conflict, reshaping global energy markets and easing macroeconomic pressures on India. According to Kotak Institutional Equities, such a deal could significantly boost corporate earnings recovery worldwide.

The report highlights that markets are eagerly anticipating the final agreement, which could restore normal shipping through the Strait of Hormuz and permit Iran to resume unrestricted oil exports. This memorandum of understanding (MoU) envisions a permanent ceasefire and reopening of key shipping routes within 60 days, providing a framework for comprehensive peace.

Lower oil and gas prices, driven by such a resolution, stand to benefit India's external balances and fiscal health, the report suggests. Kotak projects India's real GDP growth at 6.1 percent in FY27 with CPI inflation at 5 percent. However, weak monsoon forecasts pose a domestic risk, impacting growth-inflation dynamics despite relief from falling energy prices.