New Delhi: Global crude oil prices on Monday hit a record high in opening deals after reports suggested that the US and European allies are considering imposing sanctions on Russian oil imports following the invasion of Ukraine.
Brent crude softened slightly before hitting a high of $139.13 a barrel. At around 0930, Brent May futures on the Intercontinental Exchange were trading at $128.46, up 8.76% from the previous close.
West Texas Intermediate (WTI) April contract jumped 7.47% to $124.32 a barrel on the NYMEX.
During an interview on Sunday, US Secretary of State Antony Blinken said, “We are now talking to our European partners and allies to look in a coordinated manner at the possibility of imposing sanctions on Russian oil imports, while ensuring that there is still a fair supply of oil in the world markets.”
Rahul Kalantri, Vice President, Commodities, Mehta Equities said concerns over possible sanctions on Russian oil as well as delay in possible return of Iranian crude to global markets pushed prices higher.
He said, “Russia exports 4 million to 5 million barrels of oil daily, making it the world’s second largest crude exporter after Saudi Arabia. Oil prices will remain stable.”
The International Energy Agency (IEA) announced on March 4 that its member countries would release 61.7 million barrels of oil, up from an initial commitment of 60 million barrels, failing to drive down prices. IEA member states unanimously agreed on 1 March to a preliminary emergency response plan to ease the growing tightness in oil markets as a result of Russia’s invasion of Ukraine.
A recent report by Kotak Institutional Equities said the IEA’s announced release may not be enough to offset the impact on Russian exports.
The steady rise in global crude oil prices has lifted the Indian energy basket including Oman, Dubai and Brent crudes. According to data from the Petroleum Planning and Analysis Cell of the Ministry of Petroleum and Natural Gas, it was $ 111.61 per barrel on March 4.
Rising oil prices are a matter of concern for India as the country imports 85% of its oil demand.
While the rise in crude oil prices has not yet been transferred to consumers, retail fuel prices have remained unchanged for more than three months, on the build-up to the ongoing state assembly elections. However, market experts believe that with the end of the elections this week, the retail prices of petrol and diesel will increase further.
The retail price of petrol in the national capital on Monday was 95.41 per liter, while diesel was sold for 86.67 per liter.
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