New Delhi: Nearly six months into the US-Iran war, the oil market is again facing supply uncertainty, with Brent crude climbing close to $94 a barrel as hopes of a diplomatic breakthrough between Washington and Tehran fade.
For India, which imports nearly 85 percent of its crude oil requirements, a prolonged rise in global oil prices could mean a higher import bill, greater dollar demand and pressure on the rupee and current account. The impact could eventually reach consumers through higher fuel and transportation costs.Brent futures settled at around $94 per barrel on Thursday, rising 2.4 percent and touching their highest level in nearly a month. The rise came after an interim US-Iran ceasefire that began on 17 June effectively collapsed and a 60-day negotiating window expired this week without a breakthrough.
Brent crude is a global price benchmark for oil produced from fields in the North Sea.The Strait of Hormuz remains at the centre of the risk. Before the war began at the end of February, around one-fifth of global oil supplies moved through the waterway. Any prolonged disruption could tighten global supplies and push prices higher.The supply concerns are not limited to the Gulf region. The crude oil shipments from Russia’s ports fell 15 percent to around 2.3 million barrels per day in the first half of August because of disruptions at the Black Sea port of Novorossiysk following Ukrainian drone attacks, according to Reuters.
