Rising Oil Prices Bode Well For Indian IT Cos

At the current level of hostilities, there is little impact on the technology demand. However, if the fighting escalates into a broad war across the Middle East, this could change - Peter Bendor Samuel, CEO of Everest Group, tells Bizz Buzz

Bengaluru: Though the current Middle East conflict between Iran and Israel has not impacted the technology demand environment, rising oil prices augur well for overall IT industry. According to analysts, rising oil prices will provide better leeway to many enterprises in the energy space to spend more on technology transformation projects. Moreover, major Middle East economies like Saudi Arabia, UAE, Qatar and others.

“At the current level of hostilities, there is little impact (on the technology demand). However, if the fighting escalates into a broad war across the Middle East, this could change,” Peter Bendor Samuel, CEO of Everest Group, a global technology consultancy firm, told Bizz Buzz.

“There does not appear to be much of a correlation with tech and tech services spending in the EU or North America. However, if Israel does hit Iranian oil fields, the price of oil may increase which would add acceleration to the Saudi Arabia’s spending in a positive way,” he added.

In the turn of events, Iran recently fired a volley of missiles at Israel, raising fears of a broad war in the Middle East region. Though the next course of action by Israel is not yet known, analysts fear counter-attack in some form, which has the potential of further raising tensions in the region.

Meanwhile, crude oil prices have seen an upward trend post escalation of tensions in the Middle East region. Brent crude prices jumped more than three per cent to touch $80 per barrel for the first time since August.

Such rise in crude oil is likely to benefit major oil producing nations apart from companies operating in the energy and utilities space.

“The Middle East is a bright spot for both tech and tech services spending. With uncertainty of oil supply, this is likely to keep oil prices elevated. This is likely to be a positive for tech spending,” Bendor Samuel said.

However, a full-scale war in the Middle East is likely to destabilize the nascent growth recovery seen in the global economy as it may draw major powers like the US, Russia and China into the conflict. Meanwhile, recent Accenture results have indicated green shoots seen in the demand environment.

“Accenture’s results and growth outlook indicate a gradual upswing in the demand environment in the near-to-medium term. In addition, strong bookings in managed services and an increasing demand for GenAI will present opportunities for Indian IT services companies,” brokerage firm, Mirae Asset Capital Markets, said in a recent report.

Bengaluru

Though the current Middle East conflict between Iran and Israel has not impacted the technology demand environment, rising oil prices augur well for overall IT industry. According to analysts, rising oil prices will provide better leeway to many enterprises in the energy space to spend more on technology transformation projects. Moreover, major Middle East economies like Saudi Arabia, UAE, Qatar and others.

“At the current level of hostilities, there is little impact (on the technology demand). However, if the fighting escalates into a broad war across the Middle East, this could change,” Peter Bendor Samuel, CEO of Everest Group, a global technology consultancy firm, told Bizz Buzz.

“There does not appear to be much of a correlation with tech and tech services spending in the EU or North America. However, if Israel does hit Iranian oil fields, the price of oil may increase which would add acceleration to the Saudi Arabia’s spending in a positive way,” he added.

In the turn of events, Iran recently fired a volley of missiles at Israel, raising fears of a broad war in the Middle East region. Though the next course of action by Israel is not yet known, analysts fear counter-attack in some form, which has the potential of further raising tensions in the region.

Meanwhile, crude oil prices have seen an upward trend post escalation of tensions in the Middle East region. Brent crude prices jumped more than three per cent to touch $80 per barrel for the first time since August.

Such rise in crude oil is likely to benefit major oil producing nations apart from companies operating in the energy and utilities space.

“The Middle East is a bright spot for both tech and tech services spending. With uncertainty of oil supply, this is likely to keep oil prices elevated. This is likely to be a positive for tech spending,” Bendor Samuel said.

However, a full-scale war in the Middle East is likely to destabilize the nascent growth recovery seen in the global economy as it may draw major powers like the US, Russia and China into the conflict. Meanwhile, recent Accenture results have indicated green shoots seen in the demand environment.

“Accenture’s results and growth outlook indicate a gradual upswing in the demand environment in the near-to-medium term. In addition, strong bookings in managed services and an increasing demand for GenAI will present opportunities for Indian IT services companies,” brokerage firm, Mirae Asset Capital Markets, said in a recent report.