Crude oil Surges 10 per cent to 80 Dollars amid Middle East conflict; prices may touch 100 Dollars

Crude oil prices have surged by nearly 10 per cent in the international market amid the ongoing conflict in the Middle East, climbing to around 80 Dollars per barrel. Experts warn that prices could rise further and touch 100 Dollars per barrel if tensions in the region persist.

However, petroleum dealers have indicated that the spike in global crude prices is unlikely to immediately impact retail petrol and diesel prices in India.

Limited Immediate Impact

Sanjay Lath, General Secretary of the Utkal Petroleum Dealers Association, said the effects of the global price rise are beginning to be felt, but consumers may not see a direct impact at this stage.

“The effect is already beginning to be seen, and it can move in two directions. However, it will not affect regular consumers as petrol and diesel prices are unlikely to increase immediately. Even if crude oil crosses 100 Dollars per barrel, the general public may not be affected. The government and oil companies have policies in place to shield consumers, with losses initially borne by oil companies. Once the situation normalises, oil companies will recover those losses,” he said.

Production Plans and Alternative Supply Routes

Lath noted that crude oil prices had previously crossed 120 Dollars per barrel without triggering a rise in retail fuel prices.

“Last time, crude oil crossed 120 Dollars per barrel, yet petrol and diesel prices did not increase. Such situations usually do not last long. Oil-producing countries have indicated that if the Middle East situation does not stabilise, they may increase production,” he said.

He further added that if crude oil shipments are disrupted through the Strait of Hormuz, alternative routes such as the Cape of Good Hope could be used.

“This may result in delays and higher insurance and shipping costs, but these additional expenses will be absorbed by oil companies,” he stated.

India’s Strategic Preparedness

According to Lath, India is well prepared to handle potential supply disruptions.

“If the conflict continues beyond the expected period, prices may rise. However, apart from the Strait of Hormuz, India has other import routes. Supplies may arrive later than usual, but they will reach. India also maintains strategic oil reserves, finished product stocks at depots, and underground storage facilities. Taken together, the country can sustain itself for around 90 days,” he added.

With geopolitical tensions continuing to influence global markets, industry stakeholders are closely monitoring developments in the Middle East and their potential impact on energy prices.