New Delhi, March 6 (IANS). Crude oil prices had seen a jump of more than 15 percent after the war between Israel and Iran started last week, but oil prices fell on Friday morning. The main reason for this was that America has decided to give a temporary exemption of 30 days to Indian refineries to buy Russian crude oil stranded in the sea.
The April contract of benchmark Brent crude on the Intercontinental Exchange was trading 1.52 per cent lower at $84.21 per barrel. In early trade, the price of West Texas Intermediate (WTI) fell 2.10 percent to $ 79.31 per barrel.
The 30-day relaxation given by America has reduced the concerns about the global oil supply chain to some extent. There was a fear of disruption in supplies, especially due to increased tension around the Strait of Hormuz. This decision may provide some additional relief to Indian refineries in the purchase of Russian crude oil.
US Treasury Secretary Scott Besant said that to continue the supply of oil in the global market, the Treasury Department is giving 30-day temporary permission to Indian refineries to buy Russian oil. He clarified that this is limited only to the transactions of oil already stranded in the sea, so it will not bring any major financial benefit to the Russian government.
Earlier, America had said that if needed, it can also deploy naval escort to protect oil tankers passing through the Strait of Hormuz. Rising tensions with Iran have raised concerns about energy supplies and shipping security in the region, one of the world’s most important maritime trade routes. The White House also said that recent steps against Iran could improve the stability of global energy markets in the long run.
India meets about 90 percent of its total oil requirement through imports. According to data from global ship tracking company Kpler, Russia was the largest supplier of oil to India in February, supplying an average of 10.4 lakh barrels per day of oil. After this, about 10 lakh barrels per day of oil was supplied from Saudi Arabia and about 9.8 lakh barrels per day from Iraq.
India uses about 5.5 million barrels of crude oil daily, out of which about 15 to 20 lakh barrels of oil comes through the Strait of Hormuz. Therefore, the condition of this sea route is considered very important for India’s energy security.
–IANS
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