Crude Oil Rate Today: Crude oil prices have increased for the third consecutive day in the international market. The global benchmark Brent crude price has crossed 91 dollars per barrel. This is said to be the highest level since July. On the other hand, West Texas Intermediate (WTI) is also trading around $85 per barrel.
This surge in crude oil prices can have a direct impact on a major oil importing country like India. If crude prices remain high for a long period of time, pressure on petrol-diesel prices, transport costs and inflation is likely to increase.
Crude prices supported by US-Iran tensions
The main reason behind the rise in crude oil prices is the ongoing geopolitical tension between the US and Iran. US President Donald Trump has signaled that Washington is in no rush for any deal with Iran.
There is no clear agreement on a new agreement after the expiry of the agreement reached between the two countries in June. Due to this situation, the uncertainty regarding the supply of oil in the global market has increased.
Overlooking the Strait of Hormuz
The Strait of Hormuz is one of the most important sea routes for transporting oil from the Middle East to various countries of the world. Talks are going on between Iran and Oman regarding this area, while the US is not involved in this discussion.
On the other hand, US officials have signaled continued economic and diplomatic pressure on Iran. If these tensions escalate further or disrupt the flow of oil through Hormuz, it could have a major impact on global crude supplies.
Crude oil is up nearly 50% this year
Crude oil prices have risen by nearly 50 percent so far this year amid ongoing geopolitical tensions in the Middle East, the report said.
However, countries such as Saudi Arabia and the United Arab Emirates (UAE) are trying to maintain oil supplies through alternative routes to reduce dependence on the main route through the Strait of Hormuz.
What could be the impact on India?
India imports a major portion of its crude oil requirement. Therefore, a prolonged increase in crude oil prices in the international market may put pressure on India’s import bill.
Crude prices may also put pressure on petrol and diesel prices. Apart from this, the increase in transportation costs is likely to increase the prices of goods and other services. As a result controlling inflation may become more challenging.
The market is currently focusing on US-Iran relations, the situation in the Strait of Hormuz and global oil supply from the Middle East. Any major change in these factors may lead to further fluctuations in crude oil prices.
