Ongoing hostilities between Russia and Ukraine, as well as the lack of fresh supplies, have pushed crude oil price to a 14-year high of $130 per barrel on Monday.
Worryingly, the global hike in the crude oil prices led by the Russia-Ukraine crisis is expected to push India's domestic prices of petrol and diesel by over Rs 30 per litre.
The crisis as well as fears of lower supplies along with robust global demand pushed the Brent-indexed crude oil price higher.
Lately, crude oil prices have surged by nearly 20 per cent in the last three days on fear of tight supplies.
On Friday, the Brent-indexed crude oil stood at $113.76 per barrel from a 10-year high of $119.84 per barrel a day before.
The crude prices have consistently increased last week.
On March 2, the Brent-indexed crude oil prices rose to over $111 per barrel. It had increased to $102 per barrel on March 1 from $98 per barrel mark on February 28.
At present, Russia is the third largest producer of crude oil in the world.
It is feared that new and more stringent sanctions against Russia will curtail global supplies and stifle global growth.
On the other hand, India is a major crude oil importer, and for it, the price range is a cause of concern as it may add Rs 10 to Rs 30 to petrol and diesel selling prices if the OMCs decide to revise the current rates.
The country imports 85 per cent of its crude oil needs.
It is widely expected that the OMCs will revise the current prices on or after March 7, which is the last day of voting in the ongoing state assembly elections.
However, an excise duty cut may dampen the impact on petrol and diesel prices to an extent, but not entirely.
At present, fuel prices have been steady since early November when the Centre reduced excise duty on petrol and diesel by Rs 5 and Rs 10 per litre, respectively.
Since then a lot has happened on the global crude oil price front. Since early November, benchmark Brent crude oil prices have risen by over 70 per cent.
Besides, the cascading effect of higher fuel cost will trigger a general inflationary trend.
"Oil prices are trading at $130 due to delay in Iran talks and fears over more sanctions that may ban imports of Russian oil. Shipments are also slowing down," said IIFL Securities VP, Research, Anuj Gupta.
According to Kshitij Purohit, Lead of Commodities and Currencies CapitalVia Global Research: "The price of crude oil has risen a little to break above $112, as the market continues to see a lot of purchasing pressure due to the reopening of trade, a scarcity of supply, and, of course, the fact that Russia is at war.
"Bullish momentum for WTI Crude Oil above $120 could take it to $121.70 -$123 levels. The levels of support are $118.50-$116.00. Brent Oil Futures might witness a surge in price to $129.70-$131. The levels of support are $127.00-$125.30."
In addition, Tapan Patel, Senior Analyst (Commodities), HDFC Securities, said: "Crude oil prices extended rally in Monday with ICE Brent oil prices rose by nearly 9 per cent to $130 per barrel in the opening trade.
"Crude oil prices surged as US and European Union is evaluating to impose the harsh sanctions on Russia including oil import ban. The delay in Iran nuclear deal has also pushed oil prices up with fear of around 11 mb per day of supply may go off-line from the market."