After soaring higher, crude oil prices are falling again. In the wake of the ongoing Russia-Ukraine conflict, oil and gas prices had skyrocketed globally.
Now, the latest fall recorded crude oil prices below dollar 100 barrel mark. This sudden drop comes after a two-week period which saw the unprecedented rise of dollar 139 per barrel in almost 14 years.
Brent crude also gained today by reaching dollar 102.7 per barrel. However, this is still up about 32 per cent from dollar 78.11 per barrel at the beginning of this year.
Why crude oil prices are falling now?
The sudden rise in Covid-19 cases in China remains one of the biggest reasons behind this fall in crude oil prices.
Since China is the largest importer of crude oil and an unprecedented Covid outbreak by stealth Omicron has led to lockdowns in several of its major cities.
Secondly, the Iran nuclear deal renewal talks also augur well for the world grappling with higher gas and oil prices. As per The Hindu report, there are fresh hopes of reviving the Joint Comprehensive Plan of Action (JCPOA) also known as Iran Nuclear Deal.
Soon, Iran could also boost global crude oil supplies. These are some of the major reasons behind the fall in crude oil prices.
Recently, China has re-imposed fresh lockdowns to curb the worst outbreak of Covid infections.
Earlier, Iran had agreed to limit its nuclear programme in exchange for ease in economic sanctions under the 2015 deal. The relaxations under the deal mean Iran could export its oil to different countries.
Impact of crude oil prices on India
About 85 per cent of India’s crude oil requirements depends upon imports. Higher crude oil prices mean higher rates of petrol and diesel at national level.
As per reports, India’s Petroleum and Natural Gas Ministry is in talks with Russia to procure crude oil.
This comes after Russia put an offer of discounted crude oil cargoes to India. Following the EU’s barring seven Russian banks from the SWIFT financial transaction messaging system, Russia is seeing tough times in finding buyers.
The war ravaged Ukraine has seen constant shelling from Russia. Despite the announcements for humanitarian corridors, several hundreds of civilians have lost their lives.