Russia Ukraine War: The price of crude oil has risen to more than $ 139 per barrel, the highest since 2008.
The price of crude oil has risen to 139 dollars per barrel: Crude oil prices have been skyrocketing on the international market for quite some time.
The ongoing conflict between Russia and Ukraine is having a direct impact on this. On Monday, the price of crude oil reached $ 139 per barrel, the highest since 2008.
Crude oil could reach $185 per barrel
According to experts, if the conflict between Russia and Ukraine escalates, crude oil prices could reach $ 185 per barrel. Let us remind you that if the international price of crude oil rises by one dollar, the cost of petrol and diesel in India increases by 50 to 60 paise.
In such a situation, its price is bound to rise due to reduced production and supply disruptions, and it is expected that as crude oil crosses $ 150 per barrel, the prices of petrol and diesel in India will rise by Rs 15 to 22.
However, experts believe that the cost of oil will not grow all at once but rather gradually over several days.
India will bear a significant impact
Significantly, the international price of crude oil has reached a high of $ 139 per barrel in the last 14 years.
Despite the rise in crude oil prices, the country’s petrol and diesel prices have remained stable for the last four months. Oil companies are suffering significant losses in such a situation.
According to a recent I.C.I.C.I. Securities report on the increasing failures of domestic oil companies, the government-owned retailers have suffered heavy losses as a result of the sharp rise in global crude oil prices in the last two months, and now companies are preparing to put the burden on the people of the country to reduce it.
Petrol may be Rs 15 more expensive.
Many reports are circulating about the country’s rising petrol and diesel prices. According to these reports, the cost of gasoline and diesel in the country may increase by Rs 15 to 22 in the next two to four days.
The report stated that domestic oil companies would have to raise petrol and diesel prices by Rs 12.1 per litre on or before March 16, 2022, to cover the cost.
Considering the margin (profit), they will have to raise the price by Rs 15.1 per litre. If the oil companies raise their prices, it will be a significant blow to its average citizens.
Crude Oil Price Today
Fuel prices remained unchanged across metro cities on Monday, March 7, 2022. Rates have been static for over 120 days despite rising crude prices
Petrol, Diesel Prices Remain Unchanged Across Metros.
Crude Oil Price Today: Fuel prices in significant cities remained unchanged on Monday, March 7, 2022. Prices have remained unchanged for more than 120 days, the most extended period since the daily revision of prices began in June 2017.
The central government reduced excise duty on November 4, 2021, to provide relief from historically high prices. The government reduced the burden on petrol by 5 cents per litre and diesel by 10 cents per litre, resulting in significant reductions in fuel prices.
Later, in December 2021, the Delhi government reduced the value-added tax on petrol from 30% to 19.40%. 8.56 cents per litre have reduced petrol prices in the national capital.
In Delhi, a litre of petrol costs 95.41 rupees, while diesel costs 86.67 rupees. In Mumbai, petrol costs 109.98 rupees per litre, while diesel costs 94.14. Mumbai continues to have the highest fuel prices among metro cities. Fuel prices differ by state due to value-added tax or VAT.
The following are the petrol and diesel prices in major cities:
|Source Indian Oil|
State-run oil refiners such as Indian Oil, Bharat Petroleum, and Hindustan Petroleum revise fuel prices daily, considering international crude oil prices and rupee-dollar exchange rates. Any changes in petrol and diesel prices take effect at 6 a.m. every day.
India relies on imports for 85 per cent of its oil needs, and domestic petrol and diesel prices are linked to international rates. However, despite a surge in global oil prices, petrol and diesel prices have remained unchanged for more than three months.
Also, with assembly elections in the politically crucial state of Uttar Pradesh still ongoing (with the final phase of polling ending today), and elections in Punjab, Uttarakhand, Goa, and Manipur having just concluded, the rates have remained unchanged.
Crude Oil Price Today: However with global crude oil prices having risen to $130 per barrel today, a 60 per cent jump from around $80 per barrel on November 4, 2021, there are strong indications that fuel prices may be hiked after assembly election results are declared on March 10.
The Russia-Ukraine war has majorly impacted crude oil prices across the globe and keeping this in mind, fuel prices may see a sharp rise in the coming days.
Brent Crude Price: 125.32
The ongoing conflict between Russia and Ukraine is beginning to have negative consequences. As a result, global markets have plummeted, while the price of crude oil has skyrocketed. On Monday, the cost of crude oil reached 139 dollars per barrel, the highest level since 2008.
Western countries are constantly tightening sanctions against Russia in response to Russia’s attack on Ukraine. The United States and its European allies consider imposing sanctions on Russian oil imports.
As a result, Brent reached $ 139.13 per barrel, and WTI reached $ 130.50 per barrel. The price of crude oil jumped by $10 in the early hours of Monday, reaching a 14-year high. Significantly, crude oil reached $ 147 per barrel in 2008.
Sanctions on Russia’s oil supply are being planned.
On Sunday, U.S. Secretary of State Antony Blinken stated that talks are underway between the U.S. and its allies about imposing sanctions on Russian oil and natural gas imports.
He said that President Joe Biden had a National Security Council meeting the day before on the subject. Furthermore, Nancy Pelosi, the Speaker of the United States House of Representatives, stated in a letter that the House is currently looking for more robust legislation that would further isolate Russia from the global economy.
The remarks came as pressure mounted on the White House and other Western countries to take strict measures against Moscow in response to its invasion of Ukraine.
The primary cause of the crude oil price increase
Concerning the primary cause of this rise in crude oil prices, the United States, Europe, and other allied countries have decided not to purchase oil from Russia.
As a result, supply fell short of demand, and crude oil surged to its highest level since 2008. Let us remind you that Russia is the second-largest oil producer. Significantly, Russia has increased its power attacks on Ukraine, and there have been many casualties in this war.
Russia, the second largest oil producer
Significantly, since Putin declared war, there has been an increase in fear of disruption in energy exports, which is now clearly visible. Let us remind you that Russia is the world’s second-largest oil producer, primarily selling crude oil to European refineries.
European countries import more than 20% of their oil from Russia. Furthermore, Russia produces 10% of the world’s copper and 10% of the world’s aluminium production.
Imports of crude oil account for 85 percent of total imports.
Significantly, India is a major crude oil importer, purchasing more than 85 per cent of its crude oil from outside sources. India must pay for imported crude oil in U.S. dollars.
In such a case, as the price of crude oil rises and the dollar strengthens, the cost of gasoline and diesel rises at the domestic level, causing the fuel to become more expensive.
If the price of crude oil increases in the international market, India’s import bill will rise accordingly. According to one report, India’s import bill may exceed $600 billion.
People also Ask
Why are crude oil prices rising?
Following a strong economic recovery following the lockdowns, oil prices have risen sharply to nearly $100 per barrel. The demand for oil rises in tandem with the growth of the economy. Furthermore, rising geopolitical tensions between Russia and Ukraine, as well as in the Middle East, are fueling supply concerns.
What was the highest price for a barrel of crude oil?
WTI crude oil prices have risen significantly since 1976, rising from a low of 12.23 US dollars per barrel in 1976 to a high of 99.06 dollars per barrel in 2008.
Are oil prices Expected to Rise?
Crude oil production in the United States is expected to reach new highs in 2022 and 2023. In our February 2022 Short-Term Energy Outlook (STEO), we forecast that crude oil prices will remain high enough to drive U.S. crude oil production to record levels in 2023, reaching 12.6 million barrels per day (b/d).
Will oil prices go down in 2022?
According to a monthly report released Tuesday, the US Energy Information Administration raised its 2022 forecasts for US and global benchmark oil prices by about 11%. According to the EIA, Brent crude will average $82.87 per barrel this year, up 10.6 percent from the January forecast.
Will oil prices Drop in 2022?
Brent is expected to average $75/b in 2022 and $68/b in 2023, according to our forecast. Prices are falling due to a shift from global petroleum inventory declines in 2021 to inventory increases in 2022 and 2023.