2024-10-01 13:26:24
New Delhi: The possibility of disruption in the supply of crude oil from the Middle East has increased. This concern has increased since Israeli attacks on Iran-backed groups. An increase in oil prices was seen in the international markets on Monday. Brent crude futures for November delivery rose 0.22 per cent to $72.14 a barrel. This contract expires on Monday. Brent crude futures for December delivery rose 0.14 per cent to $71.64 a barrel. US West Texas Intermediate crude futures rose 0.12 percent to $ 68.26 per barrel. Crude oil is an important resource for the Indian economy. It is not only the major source of energy, but it is also widely used in different sectors like transportation, industry and agriculture. But, India is largely dependent on foreign countries for its energy needs.
Crude oil is India’s weak link
India imports crude oil from many countries of the world. Now Russia has the biggest stake in it. It has started taking about 35 percent of its total imports from Russia. Iraq, Saudi Arabia, United Arab Emirates and America also export oil to it.
Under the leadership of Prime Minister Narendra Modi, the Indian government is continuously making efforts to reduce dependence on crude. Promotion of renewable energy sources such as solar energy, wind energy and hydropower is part of that strategy.
Fluctuations in oil prices in international markets have a direct impact on India. Last week, Brent crude fell by almost 3% and WTI fell by almost 5%. This came as concerns over demand remained despite fiscal stimulus from China, the world’s second-largest economy and top oil importer.
However, a rise in prices was seen on Monday. The reason for this is the increasing tension regarding Iran in the Middle East. Iran is a major producer and member of OPEC. Israel has intensified its attacks on groups like Hezbollah and Houthi. Iran supports these groups.
Aggression is increasing
“Recent attacks in the Middle East are raising concerns that Iran could be dragged directly into the conflict,” ANZ Research said in a note. This has created a major threat of supply disruption from OPEC producers.
Israel bombed Houthi positions in Yemen on Sunday. This is an extension of Iran’s confrontation with its allies. Two days before this, Israel had killed Hezbollah leader Syed Hassan Nasrallah amid the increasing conflict in Lebanon.
US Defense Secretary Lloyd Austin has authorized the military to increase its presence in the Middle East. The Pentagon said on Sunday that Washington would take every possible step to protect its people if Iran, its allies or its supporters target US personnel or interests.
However, pressure on prices remains. The reason is that OPEC and OPEC+ are planning to increase production by 180,000 barrels per day in December. Apart from this, oil exports from Libya are also expected to start soon.
Impact visible on Indian stock markets
Investors have become nervous due to increasing tension in the Middle East. He made a massive sale on Monday. The trend of Asian markets also remained soft. This also affected the Indian stock market. BSE Sensex fell 1,272.07 points to close at 84,299.78. NSE Nifty also declined by 368.10 points to reach 25,810.85 points.