Deepak Shenoy, CEO of Capitalmind Mutual Fund, shared his views on the ongoing tensions between the United States, Israel and Iran, weighing the potential market and trade implications of the escalating conflict.
Tensions between the US and Iran escalated on Saturday with the launch of Operation Epic Fury. The strikes were first announced by Israel, and US President Donald Trump later confirmed Washington’s role.
Speaking about the goal of the strikes, Shenoy said it appeared to remain the elimination of Iran’s missile and nuclear capabilities.
“I believe Iran will get defensive missile support from Russia and/or China for protection,” he said, adding that years of oil revenues have greatly strengthened the country’s military infrastructure.
Shenoy further warned that given the scale of the military build-up, the situation may not be resolved quickly and may persist for a longer period of time. Here’s what he had to say about the conflict’s impact on stock markets and the economy.
Will oil imports be affected? Here’s what it means for India
Shenoy predicted oil prices could rise sharply as oil shipments through the Strait of Hormuz are out of service, forcing 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 biggest import. His remarks came after Dubai and other Middle Eastern regions were attacked by Iran in retaliation on Saturday, according to multiple reports.
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He cited data showing that India imported only about $113 million worth of petroleum products from Iran between April and December 2025, a negligible share of total energy imports. According to Shenoy, this relatively small exposure means that India can easily divert resources.
How will the conflict affect inflation?
He also said inflation could rise due to heightened geopolitical tensions, especially if retail fuel prices in India rise. “However, there is room to keep these prices constant for a while,” Shenoy said.
“OIL/ONGC had some gas discoveries off the Andaman last year and I hope they accelerate their drilling to be a little less dependent on foreign resources,” Shenoy said in X’s post.
Speaking about inflation in the United States, he noted that if oil rises sharply, it will eventually spook the markets.
Will the markets crash?
Addressing the question of whether stock markets could crash, Shenoy said that previous geopolitical events, including tensions between India and Pakistan, did not usually lead to market crashes. “Maybe this will be, who knows, but still: don’t expect the markets to react in any way you think they will.”
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He added that one sector that could regain investor interest is defense manufacturing, which may benefit from increased global security spending, although he did not identify any other clearly visible immediate market impact from the current situation.
“I’ll stop here. All war is bad. It’s hard to accept that we’re economic vultures trying to find a way to make money when people die for ill-conceived reasons. I hate that part of my job. So I’ll leave it at that and keep my distaste in check until we figure out how to navigate this ‘geopolitical’ event,” he concluded his lengthy post.
