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News India Live, Digital Desk: Crude oil prices: In the international market, crude oil prices rose on Friday, causing prices to reach a two -month high. The boom was more than 5%, which has increased the concern of the global economy as well as big oil importing countries like India.
What is the main reason for this huge rise in prices?
The main reason for this is the increasing geopolitical tension in the Middle East, especially the ongoing struggle between Israel and Iran. Investors are afraid that if this conflict increases, one of the world’s largest oil producing areas may be interrupted from the Middle East. This apprehension has increased the prices of crude oil.
How expensive crude oil became?
During trading on Friday, Brent crude’s futures (which is a global benchmark) rose $ 3.57 (4.2%) to $ 90.39 per barrel. At the same time, the futures of American West Texas Intermediate (WTI) crude also increased by $ 3.79 (4.5%) to $ 85.66 per barrel. Both these major benchmarks recorded an increase of about 5% throughout the day. Talking about the whole week, there has been a great increase of 7.1% in Brent crude and 6.5% in WTI. This figure is the highest level since October 2023.
Mathematics of demand and supply:
The decision by OPEC Plus (OPEC+), an organization of oil producing countries, has also pushed the prices up. There is some mixed opinion in the global market regarding demand. Strong employment figures in the US indicate increasing demand for oil, while there is also a possibility of decrease in demand in big oil importing countries like China and India.
What will be the effect on India?
India imports about 85% of its needs. In such a situation, rising oil prices in the international market directly affect the Indian economy. Petrol and diesel will be expensive, which will increase transportation costs. This will directly affect inflation and it will eventually put a burden on the pockets of the common people. It will now be seen how long the geophysical stress lasts and how much crude oil prices increase further.