Good News! Crude oil prices fall, know what will be the impact on petrol and diesel

On Monday morning, there was a decline in the prices of crude oil in the international market, which can be a good news for the common man. The biggest reason behind this decline is the news coming from Russia, which has reduced the tension in the oil market a bit.

Why did crude oil become cheaper?

Its entire connection is with the Russia-Ukraine war. Let us understand it in simple language:

1. The port was attacked: Last week Ukraine seized a very important port of Russia Novorossiysk Was attacked. This port is in the Black Sea and from here a huge amount of oil is sent all over the world.
2. Oil supply had stopped: After the attack, work at this port was completely stopped. When the news came in the market that the supply of oil had stopped, the prices started increasing.
3. Now work resumes: But now news is coming that activity has started again at this port. Oil tankers have been seen parked there, indicating that loading and supply of oil has started again.

This is just like if tomatoes suddenly stop coming in the market, the prices go up, and as soon as the supply starts back, the prices come down. Well, something similar has happened in the oil market also.

What is the big picture of the market?

However, despite all this turmoil, there is no shortage of crude oil in the market. The world’s big oil producing countries (like OPEC+) and other countries are together extracting a lot of oil. This is the reason why even after the attacks last week, there was not much rise in prices.

But there’s a catch! There is plenty of crude oil, yet why is there a shortage in the supply of petrol and diesel?

This is an interesting thing. There is plenty of crude oil in the world, but there is a shortage of refineries to clean it and make petrol and diesel. The supply of petrol and diesel has been affected due to the Russia-Ukraine war, closure of plants in Asia and Africa and closure of old refineries in Europe and America. This is the reason why refinery companies are earning more profits.

Meanwhile, Serbia’s tension

Amidst this oil game, Serbia wants to gain complete control over its country’s only oil refinery. Actually, this refinery is owned by a Russian company, and Serbia is taking this step to protect it from American sanctions.

Overall, the news of resumption of supply from Russian ports has made crude oil cheaper at the moment, but there remains uncertainty in the market due to tension between Russia and Ukraine and lack of refineries.