India, June 26 -- If the US-Iran deal were to hold and hostilities were to cease and maritime traffic flow through the Strait of Hormuz normalised permanently, the world would be spared the prolonged pain of what was described as the greatest energy shock in capitalism's history. To be sure, a completestatus quo ante, as far as supplies of oil and other distillates from West Asia is concerned, willtake time, given the war-time damage toproduction facilities. This is good news regarding first principles. But commodity markets operate in a world which is more complicated than just first principles. Prices often respond to ultra-short-term or long-term considerations. The latter played a role in keeping oil prices from hitting stratospheric levels - the all-time high was just $126 per barrel - even when the war was waging. Markets believed that the US will eventually make a deal, especially given the mid-term elections in November. Now that the fighting is over and the Strait is open - at least as of now - Brent crude has fallen sharply to pre-war levels below the $75 per barrel threshold. Can we expect Brent to stay below this threshold going forward? Most market watchers do not think so. The sharp drop in oil prices is likely a result of a temporary supply glut as accumulated stock is releasedfrom what became a maritime and energymarket chokepoint. Once the pent-up supplies are exhausted, major countries start replenishing their strategic reserves and some of the demand destruction which followed the supply shock is reversed, prices could increase once again. To be sure, nobody expects them to cross the $100 level unless hostilitieswere to resume. What does all this mean for India? Three key takeaways can be listed. One, it is too early to let the macroeconomic guard down at the moment and the situation must be watched closely as it evolves. The overall outlook will, of course, also depend on things such as the forex markets. Then, once there is clarity on the resumption of supplies from West Asia, a gradual pivot can be made from the more expensivesources which India had tapped into to ease its supply constraints. In this vein, commercial LPG supply restrictions have already been lifted on Thursday. The terms-of-trade shock to the exchequer as well as consumers must be offset. Finally, appropriate lessons must be learnt to increase resilience to similar supply shocks....