After new attacks by Iran on the energy bases of Gulf countries, the prices of crude oil and natural gas have increased by up to 30% in the global market today on March 19. Due to this crisis, the prices of gas cylinders and petrol and diesel may increase in India. Iran has targeted Qatar’s main LNG plant, increasing the possibility of supply disruption. 1. Crude prices increased by 6% and crossed $ 114 per barrel. Before the war, Brent crude was below $ 73. Now its price has jumped to close to $ 114 per barrel. Whereas the prices of Indian basket have reached $ 146 per barrel. Crude oil is identified on the basis of three major benchmarks. Crude oil is identified and sold across the world mainly on the basis of three major benchmarks, which are called Brent, WTI and OPEC basket. Brent crude comes from marine wells in the North Sea (Europe) and two-thirds of the world’s oil trade depends on its price. Whereas WTI originates from the mainland areas of America and due to its purity is the main standard of the American market. The OPEC basket is an average mix of individual crude oils produced by the Organization of the Gulf Nations (OPEC) such as Saudi Arabia, Iran and Iraq. What is Indian Basket? India does not buy oil from any one country or the same type, but buys different varieties of oil from many countries like Iraq, Saudi Arabia, Russia, UAE. The average of prices of all these different types of oils is called ‘Indian Basket’. 2. Gas prices in Europe jumped by more than 30%. Iran’s attack on Qatar has had the biggest impact on gas prices in Europe. Here the main gas contract Dutch TTF benchmark at one time jumped by almost 30% to 70 euros. However, currently it is trading around 63 euros with a rise of 16%. Gas prices in Britain increased by 140% Wholesale gas prices in Britain have increased to 171.34 pence per therm ($2.29). Prices had never reached this level since January 2023. It has increased by about 140% since the war started. Before the war its price was 71.13 pence per therm ($1.33). Understand the impact on India in 2 points… India imports 85% of its crude oil and more than 50% of its gas, so every movement there affects our pockets and economy. 1. Prices of petrol, diesel and LPG may increase. The price of Indian basket has reached $ 146 per barrel. If crude oil remains at this level, it will be difficult for government oil companies to sell petrol and diesel at the current prices. There is a possibility of an increase of 10 to 15 rupees in the prices of petrol and diesel in the coming days. Also, the price of LPG cylinder may also increase due to shortage of gas. Recently, oil refining companies had increased the price of domestic LPG cylinder by Rs 60. 2. Food items can also become expensive. Crude oil is not only used as fuel for vehicles, but is also used in raw materials for paints, plastics, fertilizers and medicines. Due to diesel becoming expensive, freight transportation will become expensive, which will increase the prices of fruits, vegetables and grains. Overall, the budget of the common man will get spoiled. 2 reasons for increase in crude and gas prices 1. Qatar’s Ras Laffan plant closed. Qatar’s Ras Laffan has suffered a lot due to Iran’s drone attacks. It is the world’s largest LNG hub and about one-fifth (20%) of the global supply comes from here. After the attack, this plant is currently closed. Due to this the supply has stopped. 2. Almost closure of ‘Strait of Hormuz’ The biggest challenge for India is the closure of ‘Strait of Hormuz’. This is about 167 km long waterway, which connects the Persian Gulf to the Arabian Sea. Due to Iran war this route is no longer safe. In view of the danger, no oil tanker is passing through there. 20% of the world’s total petroleum passes through here. Countries like Saudi Arabia, Iraq and Kuwait also depend on it for their exports. India sources 50% of its crude oil and 54% of its LNG requirement through this route. Iran itself exports through this route.
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Indian basket crude reached $146, gas shortage increased: Qatar’s gas plant closed after Iran attack; Prices in Europe jumped by 30%
