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Amid rising tensions in West Asia, Saudi Arabia has precautionary closed its important East-West oil pipeline bypassing the Strait of Hormuz. After this development, the prices of crude oil in the international market increased by more than three percent and the crude reached around $ 108 per barrel.

Pipeline closed after drone attacks

According to the Saudi Foreign Ministry, several drone attacks from Iraq targeted the East-West Pipeline located in the Riyadh and Medina areas. There have been reports of damage to property and injuries to many people in the attacks. The pipeline has been closed as a precautionary measure due to safety checks.

Capacity to carry 50 to 70 lakh barrels of oil daily

The East-West Pipeline is an important part of Saudi Arabia's oil transportation network. Its capacity is to carry about 50 to 70 lakh barrels of oil daily. This pipeline was playing an important role as an alternative route amid pressure on oil supply due to the ongoing US-Iran conflict.

Pressure on Indian oil companies may also increase

The pipeline blockage has increased concerns about supply in the global oil market. If this situation persists for a long time, the availability of crude oil and the cost of its purchase and transportation may increase. India meets a large part of its requirement through crude oil imports, hence a prolonged rise in international prices may impact the costs of Indian oil companies.

Will petrol and diesel become expensive in India?

At present it is too early to say how much the prices of petrol and diesel will increase. But if crude oil prices remain high and supply pressure continues for a long time, the margins of Indian oil companies may be affected. In such a situation, there may be a possibility of increase in domestic fuel prices.

Increased attention on Hormuz and Red Sea also

Amid tensions in West Asia, maritime oil supply routes also remain a matter of concern. The growing threat to shipping in the Red Sea and the activities of Iran-backed Houthi rebels in the Bab-el-Mandeb region have also raised concerns about alternative sea routes.

In such a situation, the market will keep an eye on the price of crude oil, the supply situation from West Asia and the purchase cost of Indian oil companies in the coming days.