Major fall in crude oil prices: The full impact of global uncertainty in the international crude oil market is clearly visible. There has been varying speculation about the far-reaching impact of President Donald Trump’s efforts to boost the U.S. crude market in the global market by completely banning oil exports from Iran and Russia. But the latest situation is that crude oil prices have moved closer to a one-year low ($73 per barrel).
Crude oil prices are expected to be at $75-80 per barrel in the international market for the next six months. This has been recognised as good for India in many ways. This level will minimise the negative impact of the rupee’s continued value against the dollar on India’s economy. This will increase the margins (profits) of state-owned oil companies. But it is less likely that state oil companies will also reduce retail prices of petrol and diesel for the general public.
Government data is also showing that crude oil prices have softened. In the first five days of February, Indian companies bought crude oil at an average of 77.77 per barrel. The average price in January 2025 was $80.2 per barrel. During September to December, 2024, India has paid an average of $73.69, $75.12, $73.02 and $73.02 per barrel for the purchase of crude oil.
Crude oil falls below $72 per barrel
On Wednesday, the price of crude oil in the international market fell sharply to below $72 a barrel, in what is said to be the lowest of a one-year level. It has come down after the new U.S. government increased crude oil production and the start of a trade war with China, Mexico, and Canada.
Officials at state-owned oil companies say the situation is highly precarious and likely to continue for the next several months. It should also be remembered that buying oil from Russia will now be more difficult for India than in the past. There are indications that India has also started cutting crude oil purchases from Russia.
The price of fuel was last changed in March 2024
The report said that crude oil prices would remain at $75-80 a barrel for the next six months if the U.S. increases crude oil production, Saudi Arabia does not cut oil production and Russia does not disrupt oil supplies. This is a good sign for India. If the retail price of petrol and diesel in India remains at this level, oil companies are likely to make a profit of Rs 07-09 per litre.
The last revision in oil prices in the country was in March 2024 when oil companies cut retail prices of petrol and diesel by two rupees per litre. India then bought crude oil at $89 a barrel. After that, crude oil prices fell to $73 a barrel, but the general public received no relief.
