NEW DELHI : Crude prices fell below $100 a barrel Tuesday -- the first time in a fortnight -- as peace talks between Russia and Ukraine sparked hopes of easing global tensions.
Iranian foreign minister Hossein Amirabdollahian’s statement on Tuesday that the crisis in Ukraine and nuclear talks in Vienna are not linked and that Russia will stand with Iran until the end of the nuclear talks also eased the oil markets. Russian foreign minister Sergi Lavrov also said that Moscow is in favour of resumption of the 2015 Iran nuclear deal and that Russia is waiting for the US to lift sanctions on Iran.
The May contract of Brent on the Intercontinental Exchange was $99.79 per barrel at the time of writing, down 6.65% from its previous close.
The price of West Texas Intermediate (WTI) also fell below the $100 per barrel mark. The April contract of WTI on NYMEX declined 7.05% to $95.75 a barrel.
“Crude oil prices showed heavy selloff amid Russia-Ukraine de-escalation talks and shutdown in China because of fresh virus outbreaks. The US also ramped up its oil production after prices hit 14-year highs," said Rahul Kalantri, vice-president, commodities, Mehta Equities Ltd.
The resurgence in covid cases in China has been a major dampener for the oil market. Around 10 cities and counties face a covid-19 lockdown, including the tech hub of Shenzhen.
The decline in prices comes as major relief as oil prices have been largely elevated since tensions intensified between Russia and Ukraine. On March 7, Brent touched $139.13 per barrel, the highest since 2008. However, on March 9, prices started to decline after the UAE, a member of the Organization of the Petroleum Exporting Countries (OPEC), said that it favoured high oil production by the cartel.
Rising oil prices have been a cause of concern for India as it imports 85% of its oil demand. The recent incessant rise in global crude prices has raised the price of the Indian energy basket, comprising Oman, Dubai, and Brent crude.
It was recorded at $110.30 per barrel on March 14, according to data from the petroleum planning and analysis cell of the ministry of petroleum and natural gas.
The increase in crude oil prices has not been transferred to the consumers so far with retail fuel prices being unchanged for more than four months. However, retail fuel prices may sharply increase, with the mounting pressure of high oil prices on oil marketing companies, market experts said.
On Tuesday, the retail price of petrol was unchanged at Rs95.41 a litre in Delhi, while diesel sold for Rs86.67 per litre.
Rising international crude oil prices remain a huge threat to the economy as they accentuate inflationary pressures, said a recent report by Brickwork Ratings.
