INTERVIEW: South Asia conflict can accelerate energy security efforts, add shine to gold, says Jim Rogers

South Asia will accelerate energy security efforts after the recent conflict between India and Pakistan, leading commodities investor Jim Rogers said, adding that any further escalation could strengthen precious metals but have a limited impact on world oil prices due to the region's relatively smaller demand footprint.

Even if India and Pakistan decide to boost oil buying to hold much higher level of stocks, it is unlikely to make a big impact on oil prices unless there is a prolonged conflict between the two South Asian neighbors, said Rogers, who is the chairman of Beeland Interests, Inc. and co-founder of the Quantum Fund along with George Soros.

"What we saw in South Asia last week has brought the region's energy security concerns into the limelight," Rogers told Platts, part of S&P Global Energy, in an interview. "The world is already worried about energy security, and any long-drawn conflict between India and Pakistan can only make it worse."

India and Pakistan agreed to an immediate ceasefire May 10, following four days of military strikes that had frazzled energy, shipping, and agriculture markets and disrupted port operations.

According to Kang Wu, global head of macro and oil demand research at Platts, ceasefire developments over the weekend would help to bring calm to commodity, energy, and freight markets and reduce the fear of potential trade flow disruptions.

Higher stocks a priority

"Holding much bigger stocks of oil will be a big priority from now onwards for both countries. The question is how much extra bandwidth both countries have in creating extra storage space," he added.

In 2024, India imported around 4.9 million b/d of crude. The country's SPRs currently provide reserves of about 9.5 days of net oil imports. State-run oil companies hold storage facilities for crude oil and petroleum products for 64.5 days of total net imports, bringing the current total national storage capacity of crude and petroleum products to 74 days of total net imports.

On the other hand, IEA member countries are required to ensure oil stock levels equivalent to at least 90 days of their net imports.

Pakistan imports nearly 190,000 b/d of crude oil on average. It also imported 3.973 million mt of motor gasoline and nearly 1.492 million mt of diesel in the nine months of the fiscal year ended March 31, up 12.4% and 21.3%, respectively, from a year earlier, data from the country's Oil Companies Advisory Council showed.

"We might see more work going on in terms of building storage at various places in South Asia. But on the global price front, the influence on price will be limited -- as we saw last week -- and this is due to the much smaller volumes of imports the region accounts for, compared with, for example, China. With so much of supplies available, the oil market can absorb the kind of turbulence they saw in South Asia," Rogers said.

Under the base-case scenario, Energy expects Platts Dated Brent to moderate to $68/b on average for the whole of 2025, from an average of $81/b in 2024. Furthermore, this trend is expected to continue into 2026, with the average price projected to ease further to $66/b. In the meantime, downward risks loom large if OPEC+ unleashes more volumes of oil to the market.

Region's affinity for gold

Rogers said that geopolitical turbulence and the tariffs across the globe had led to investors flocking to precious metals since they were safe-haven assets, a trend that is set to continue in the foreseeable future.

"We have seen the latest rally in gold. I think silver also has a strong opportunity as it will play catch-up at some point," Rogers said.

Gold has continued its impressive rally this year, repeatedly setting new record highs across major currencies, and inched close to $3,500/oz in April. According to the World Gold Council, a weaker dollar and heightened geopolitical risk -- including tariff-led fear and uncertainty -- have been key drivers of gold's performance. Alongside this, strong gold ETF buying across most regions has been propelling gold higher.

India is one of the largest markets for gold, and growing affluence is driving growth in demand. Gifting gold is a deeply ingrained part of marriage rituals in India, and weddings generate approximately 50% of annual gold demand in India.

Despite record-high prices, India's gold imports rebounded sharply in March after two consecutive months of decline. According to data from the Ministry of Commerce, imports climbed to $4.4 billion, nearly double the previous month's figure and significantly higher than the $1.53 billion recorded in the same month a year earlier. WGC said while volumes were still below the average monthly imports of $7.3 billion set between August and December 2024, the sharp uptick suggests a resurgence in demand and underscores continued interest in gold, even at elevated prices.

"Tensions in the South Asian region -- if it continues or gets revived in the region -- will boost the appeal of gold and silver in South Asia. With India being a top gold importer, I can only see prices going up. Even silver can have a strong upside during times of geopolitical turbulence," Rogers said.

"But I hope peace returns permanently to the region. That will help the financial markets in the region to continue registering a strong period of growth -- a trend that we have been seeing for some time now," he added.