Threats and hopes in international oil market

At a time when crude oil prices are stable in the international market, the European Union, the US, Australia, Britain, and Japan are planning to place new sanctions on Russia. Consumers in India fear that this will harm our country too. Oil companies have refrained from increasing the price of fuel for six months now. The reason is the central government’s intervention in view of the assembly elections in some states.

Since the election in Gujarat and Himachal Pradesh are over, everyone is anxiously waiting for the change in petroleum prices. There are plans to bring the prices down. This news will bring cheers to the consumers.

The price of one barrel of crude oil is $90 now. The price has been stable for one month. The current prices of petroleum is the same now as it was when the international price of crude oil was $120 per barrel. As the price of crude oil is stable, the central government might pressurize the oil companies to bring down the prices a bit. Also, it is heard that the government is going back to the process of revising oil prices daily.

Meanwhile, developed nations are preparing to impose harsh sanctions on Russia for continuing its hostilities with Ukraine. The European Union and other western countries have warned that Russia, which is the second biggest oil producing country, must not raise the price of oil more than $60 a barrel. The western powers say that if the Russians do not heed their warning, then harsher sanctions will follow.

However, the Russians have rejected the warnings and are saying that they will not decrease the fuel prices even by a dollar out of fear of the western countries. The EU and some of its allies have put sanctions on the ships that is taking crude oil from Russia and also the insurance companies.

The Russian stand is that even if they have to lower their production, they would not sell oil at $60 per barrel to countries that want to impose sanctions on Russia. That country is also ready to give some concession to countries that will buy oil from it on market price.

The western countries are accusing Russia for using the huge revenue garnered through oil supply to finance its war against Ukraine. They say that they are pressing forward with the limit on oil price and sanctions to bring Russia under control and to stop the war in Ukraine.

India is importing huge quantities of oil from Russia. Because of this, some western countries have turned against India. However, India’s decision is to import as much oil as possible from Russia, which is a friendly nation to us.

External Affairs Minister, Jaishankar told German Foreign Minister about India’s stand on Russian imports very clearly during a meeting yesterday. Like India, China and Pakistan are also importing oil from Russia. These countries are also not taking seriously the new round of sanctions against Russia.

The OPEC has decided to maintain the level of oil production when countries like the US and EU are trying to control the oil market. This decision by the OPEC will help tide over the crisis that the western countries intervention can cause.