As the tension continues to escalate between Russia and Ukraine, the Brent oil has surged up to $100 USD a barrel. This has happened for the first time since 2o14 after Russian President Vladimir Putin announced the military operation against Ukraine.
For the unversed, Russia is the world’s second-largest oil producer and sells crude to European refineries. Russia is also the largest natural gas provider to Europe.
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Navneet Damani, Senior Vice President – Commodity & Currency Research, Motilal Oswal Financial Services said, “Sanctions forcing Russia to supply less crude or natural gas would have substantial implications on oil prices and the global economy. Russia accounts for one in every 10 barrels of oil consumed globally, so it is a major player when it comes to the price of oil and it’s really going to hurt consumers at the petrol pumps.”
Even though international markets have seen a surge in prices, Indian oil companies like Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp have maintained the petrol and diesel rates for over three months. However, amid the Assembly elections 2022 taking place in India, analysts have already predicted that oil prices will skyrocket after the results are announced
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What does this Russia-Ukraine conflict mean for India?
This might lead to the rise of the subsidy on LPG and kerosene meaning the price will go up. Crude products in India risks contribute to over 9 per cent of the Wholesale price index (WPI) basket.