Crude oil nears $100 a barrel amid fears of Russian invasion of Ukraine
08 Mar 2022
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Crude oil prices surged to nearly $100 per barrel on Tuesday as major crude producer Russia sent troops into two breakaway regions of Ukraine, triggering market panic.
Benchmark North Sea Brent crude oil reached $99.50 per barrel, the highest level in seven years. At around 1630 GMT, it pulled back to under $97, still with a gain of around 1.5 per cent compared with late Monday.
However, European stocks bounded into positive territory, after heavy falls at the open, as the Kremlin said it remained open to all diplomatic contact over Ukraine and Western nations held off on imposing draconian sanctions.
The jump in oil prices is compounding worries about inflation around the world, with the US Federal Reserve coming under intense pressure to tighten monetary policy to prevent prices running out of control.
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 Rs10 to Rs30 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 state-run oil marketing companies (OMCs) will revise the current prices on or after 7 March, 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 Rs5 and Rs10 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.
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