Crude prices remain elevated on intensifying Russia-Ukraine conflict
Premium- Amid reports of ceasefire violation by Russia and no sign of easing tensions, analysts expect the prices to maintain the upward trajectory
NEW DELHI : Global crude oil prices continue to remain elevated amid intensifying Russia-Ukraine conflict.
Amid reports of "ceasefire violation" by Russia and no sign of easing tensions, analysts expect the prices to maintain the upward trajectory.
Russia had declared a limited ceasefire to allow evacuation of civilians from two Ukrainian cities on Saturday, but the ceasefire fell apart, according to Ukrainian authorities.
Further, International Energy Agency's (IEA's) announcement on late on Friday evening that its member countries will release 61.7 million barrels of oil, higher than the initial commitment of 60 million barrel, also is unlikely to soothe to prices in the coming week. IEA member countries unanimously agreed on 1 March for an initial emergency response plan to alleviate the increasing tightness in oil markets resulting from Russia’s invasion of Ukraine.
A recent report by Kotak Institutional Equities said that the IEA's announced release may not be sufficient to offset an impact to Russian exports.
"IEA’s initial release of reserves will be unable to meet the shortfall in global oil supply if Russian supplies were to be impacted in the coming days. Russia’s crude oil production has ranged 10 mn b/d (barrels per day) and exports 4.7 mn b/d in the recent months, which implies the agency would have to more than double its current reserve release if it would need to offset an impact on Russian exports," it said
The April futures contract of Brent crude on the Intercontinental Exchange rose nearly 7% on Friday to $118.11 per barrel, from its previous close. Similarly, the West Texas Intermediate (WTI) crude was up 7.44% at $115.68 per barrel.
The incessant rise in global crude prices have lifted the Indian energy basket, comprising of Oman, Dubai and Brent crude. It was last recorded at $117.39 per barrel on 3 March, according to data from the Petroleum Planning & Analysis Cell of the Ministry of Petroleum and Natural Gas.
The spiralling oil prices come as a cause of concern for India as the country imports 85% of its oil demand.
Although, the increase in crude oil prices has not been transferred to the consumers so far as the retail fuel prices have been unchanged for the over three months now on the buildup to the ongoing state assembly elections. However, market experts believe, as the elections end in the coming week, retail prices of petrol and diesel will be increased going ahead.
In the national capital, the retail price of petrol on Friday was ₹95.41 a litre, while diesel was sold for ₹86.67 per litre.
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