Crude oil prices are once again falling in the international market. Crude oil prices have fallen for the third consecutive day. On August 26, Brent crude slipped 2.19% to $86.39 per barrel. At the same time, WTI crude is also trading at the level of $ 80 per barrel, falling by 1.87%. This sudden fall in crude oil prices has brought very good news for India. India imports about 85 percent of its oil needs. In such a situation, when the price of crude increases in the global market, India's import bill increases significantly. Now the reduction in prices will provide a big relief to India's economy.
The real reason for the decline in crude oil There is a big diplomatic development behind this sharp fall in crude oil prices. Actually, a very important conversation is going on between Iran and Oman. This discussion is about resuming the movement of sea vessels through the Strait of Hormuz. The two countries are currently in the final stages of reaching an interim agreement. According to the report of Oman News Agency, Oman's Foreign Minister Badr Albusaidi had detailed discussions with Iran's Foreign Minister Abbas Araghchi. Both the leaders seem to have agreed on the initiative to create a 'Temporary Joint Maritime Corridor'.
Permanent corridor will be built for maritime traffic Bloomberg has said in its report that this matter will not be limited to just temporary corridors. In the coming days, both the countries will work on creating a permanent route for the movement of ships through the Strait of Hormuz. Along with this, talks will also continue on important issues like governance, information sharing framework and traffic management. Tasnim News Agency has also reported that there is a plan to prepare a permanent route within 30 to 60 days. This will allow normal movement of ships through the Strait of Hormuz to resume.
The situation had worsened due to America-Iran tension Even though oil prices have softened recently, crude oil has become costlier by 40 percent this year. The main reason for this has been the ongoing tension between America and Iran. This dispute had a direct impact on the crude oil supply from Gulf countries. There was a sharp rise in prices due to reduced supply. The conflict between the two countries started on 28 February. After this, crude oil had jumped to $ 120 per barrel. Later, America imposed strict economic sanctions on Iran to put pressure on it.
Pakistani Army Chief's visit increased excitement Amidst this whole incident, the recent visit of Pakistan Army Chief to Iran is also considered very important. According to Iranian media, the results of this one-day visit have been very special. When there was a ceasefire between America and Iran in June, oil prices went below $80. Pakistan played a big role in that peace agreement. However, that ceasefire expired in August. Now once again diplomatic efforts have intensified, whose direct impact is visible on the crude oil market.