New Delhi. The effect of military tension in West Asia is now clearly visible in the form of rise in crude oil prices. Since the beginning of this tension, the prices of crude oil have skyrocketed due to the halt in the supply of crude oil through the Strait of Hormuz and the reduction in the production of crude oil by major oil producing countries like Kuwait and the United Arab Emirates (UAE).
At present, crude oil has crossed the level of $ 110 per barrel in the international market. During the last seven days, the price of crude has increased by more than 55 percent. Due to this rise, Brent crude has crossed the level of $ 115 per barrel, while West Texas Intermediate (WTI) crude has also reached above the level of $ 113 per barrel.
Today Brent crude started trading at the level of $ 107.92 per barrel and within a short time it jumped to the level of $ 119.14 per barrel. After this, there was a slight downward trend in its price. According to Indian time, at 11 am, Brent crude was trading at $ 115.57 per barrel, an increase of $ 22.88 per barrel, or 24.69 percent.
Similarly, West Texas Intermediate (WTI) crude started trading today at $ 107.81 per barrel and within a short time it jumped to $ 119.48 per barrel.
However, later its price also declined, due to which at 11 am Indian time, West Texas Intermediate (WTI) crude was trading at $ 113.65 per barrel, a jump of $ 22.75 per barrel, i.e. 25.02 percent.
Apart from spot deals, Brent crude futures are trading at $ 115 per barrel, up by 22 percent, while West Texas Intermediate (WTI) crude futures are up by a huge 27 percent at $ 115.21 per barrel.
In fact, after the beginning of tension in West Asia, Iraq, a member of the Organization of Petroleum Exporting Countries (OPEC Plus), has reduced the production from its three large southern oil fields by about 70 percent. After this cut, instead of producing 43 lakh barrels of crude oil daily from these three oil fields, now only 13 lakh barrels of crude oil is being produced.
Similarly, Kuwait has also announced to cut crude oil production. However, information about how much crude oil production will be cut by Kuwait has not been given yet.
According to market experts, a major reason for the rise in crude oil prices is the continuous attacks on oil infrastructure. While America and Israel have targeted Iran’s oil facilities, Iran is also targeting the oil infrastructure of America’s ally in West Asia.
US and Israeli forces targeted oil depots, oil storage tankers and petroleum transfer terminals in Tehran. After this, Iran also retaliated by attacking the oil bases of United Arab Emirates, Kuwait and Bahrain with drones and missiles.
Due to attacks on oil infrastructure, pressure has increased on the oil producing countries of the Middle East, the effect of which is visible in the rise in the price of crude oil. It is believed that due to military tension in West Asia, the supply of crude oil may remain affected for a long time. When this happens, many Asian countries like India, which depend on oil imports, are being affected.
India buys 80 percent of its crude oil requirement from the international market. Similarly, Japan also depends on imports to meet its petroleum needs. In this also, it buys 90 percent crude oil from Middle East countries only. Apart from this, China has also reduced the export of crude oil to control the price of petroleum products.
As far as India is concerned, there is a possibility of a huge increase in the country’s import bill due to the price of crude oil going above $110. Similarly, the country’s oil economy is also being negatively affected.
Although according to the claim of the Indian government, there are sufficient reserves of petroleum products in the country, but if the price of crude oil is not controlled soon, then the prices of petrol, diesel and other petroleum products may increase in India too.
Along with this, due to buying expensive crude, India will have to spend comparatively more dollars, which will also affect the country’s foreign exchange reserves and there will be a possibility of pressure on the fiscal deficit.
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