Once again the effect of increasing military tension in the Middle East is becoming visible on the global crude oil market. Amidst the latest attacks and fear of further increase in the scope of war, the prices of Brent Crude have reached close to $ 100 per barrel. Energy market experts believe that if the situation does not improve soon, crude oil prices in the international market may cross the $100 level. This will have a direct impact on countries like India, which import most of the crude oil they require.
Why are oil prices increasing?
The Middle East is among the largest oil producing regions in the world. Any kind of military conflict or geopolitical tension here can affect the oil supply. Following the recent attacks, investors fear that if the war spreads further or impacts key sea routes, global oil supplies could be disrupted. Due to this apprehension, there is a sharp rise in oil prices in the international market.
Analysts say that at present there is an atmosphere of fear in the market and investors are turning towards safer options. If the tension persists for a long time, prices may rise further.
What will be the impact on India?
India imports about 85% of its total oil requirement. In such a situation, every major increase in crude oil prices affects the country’s economy. Due to expensive oil, the cost of petrol, diesel, LPG and aviation fuel may increase. Apart from this, due to increase in transportation costs, many everyday items may also become expensive.
Experts believe that if crude oil remains around $ 100 per barrel for a long time, it may increase pressure on inflation. Besides, the government’s import bill and current account deficit may also be affected.
Also keep an eye on stock market and global economy
The impact of the rise in oil prices is not limited to fuel only. Due to this, stock market, airline companies, logistics, chemical and manufacturing sectors can also be affected. At the same time, due to high energy costs, controlling inflation can also be challenging for the central banks of many countries.
Market experts say that in the coming days, investors will keep an eye on the situation in the Middle East and the reaction of oil producing countries. If tensions ease, prices may soften. But if the situation worsens, crude oil may cross the level of $ 100 per barrel, the impact of which will be seen on the economy of the entire world.
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