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The biggest and shocking news of this time is coming out from the Global Energy Market. Just before the second round of high-level peace talks between the US and Iran to be held in Burgenstock, Switzerland, diplomatic tension in the Middle East and the strategically sensitive ‘Strait of Hormuz’ has reached its peak. Despite this, on Monday, June 22, instead of any rise in the prices of crude oil in the international market, a huge softening and fall has been recorded.
After this unexpected fall, the price of benchmark Brent crude in the international market has once again slipped below the psychological level of $80, due to which importing countries around the world including India have heaved a sigh of relief.
Brent crude came at $79.60, WTI also fell by more than 2%.
According to the latest data received from the international commodity market, the decline in crude oil prices is as follows:
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Brent Crude: Brent oil, considered the international standard, today fell by $ 1.01. $79.60 per barrel Has reached the level of.
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WTI Crude: The price of American benchmark West Texas Intermediate crude also Big decline of 2.02 percent Has been registered. After this it is in the market $75.77 per barrel Is trading at Rs.
This decline is also surprising for market experts because this slowdown in prices is being seen despite the partial impact on the movement of ships through the Strait of Hormuz.
After all, why is the price of crude oil falling amid tension?
Despite Iran’s strict surveillance and threats on the Strait of Hormuz, there are mainly two major reasons behind the fall in crude oil prices:
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Strong hope for peace agreement: The global oil market and big investors are confident that the second round of talks between the US, Iran, Pakistan and Qatar in Switzerland will ultimately be successful. The market is hopeful that a permanent peace agreement (Final Draft) will be completed between the two countries, which will avert the threat of war in the Gulf region forever.
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Easy way to do business: Investors believe that if this deal is finalized, then the ongoing sovereignty dispute over Hormuz will end completely and global trade of crude oil will become much easier and safer in the coming days. Due to this positive sentiment, selling is being seen in the market.
Iran closes Hormuz Strait again, an atmosphere of fear among shipping companies
The situation on the diplomatic front is still not completely normal. Although a ceasefire was announced between the two countries, sporadic attacks continued behind the scenes in the past few days. Iran has recently accused America and Israel of openly violating the terms of the initial Memorandum of Understanding (MoU).
Due to this resentment, Iran’s Islamic Revolutionary Guard Corps (IRGC) has taken a tough stance and once again announced closure of the Strait of Hormuz for the movement of commercial ships. After this military threat from Iran, many big international shipping companies have started avoiding passing through this sea route to avoid the risk, which has created some pressure on the supply chain.
What does this mean for India? Will the prices of petrol and diesel decrease?
This fall in crude oil prices is no less than a big good news for a huge consumer country like India. India imports about 80 to 85 percent of its crude oil requirement from abroad.
If crude oil remains below $ 80 per barrel in the international market for a long time, then the input cost (import cost) of Indian oil marketing companies (OMCs) will reduce drastically. This will reduce the burden of subsidy on the government treasury and in the coming days, the hope of common citizens of the country to get a big relief in the prices of petrol and diesel in the domestic market will increase significantly.