Oil Prices Drop to Two-Week Low as Israel, Iran Agree to Ceasefire
Oil prices plunged by more than 5% on Tuesday, hitting a two-week low after Israel agreed to a ceasefire proposed by U.S. President Donald Trump to end hostilities with Iran.
New Delhi: Oil prices plunged by more than 5% on Tuesday, hitting a two-week low after Israel agreed to a ceasefire proposed by U.S. President Donald Trump to end hostilities with Iran.
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Brent Crude and WTI Prices Fall Sharply
- Brent crude dropped by nearly $4, trading at $67.7 per barrel
- West Texas Intermediate (WTI) fell by $3.75 to $64.76 per barrel
This sharp decline in prices is due to easing fears over oil supply disruptions in the Middle East after the truce.
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Netanyahu Confirms Truce After “Achieving Objectives”
Israeli Prime Minister Benjamin Netanyahu stated that the ceasefire was agreed upon after Israel “eliminated” Iran’s nuclear and ballistic missile threat. The truce came after 12 days of intense airstrikes, raising fears of a broader regional conflict.
Iran’s Oil Influence and Strait of Hormuz Threat
- Iran produces 3.3 million barrels/day — about 3% of global crude supply
- Exports 1.5 million barrels/day, mainly to China (80%) and Turkey
- Previously, Iran had threatened to block the Strait of Hormuz, a crucial oil shipping route responsible for 20% of global oil trade
With the ceasefire in place, the threat of supply disruptions has eased, calming global oil markets.
Impact on India’s Economy and Oil Import Bill
India imports around 85% of its crude oil needs, making it vulnerable to global oil price hikes. Higher prices lead to:
- A rise in the import bill
- Increased inflation
- A weaker rupee against the U.S. dollar
India’s Response: Monitoring and Diversification
Petroleum Minister Hardeep Singh Puri assured that the Indian government is monitoring the Middle East crisis closely. He emphasized:
- Sufficient fuel supply by Indian Oil, Bharat Petroleum, and Hindustan Petroleum
- Continued energy imports from multiple countries
- Strategic oil reserves to cushion supply shocks
India’s Strategic Oil Reserves: Key Facilities
India has built strategic petroleum reserves for use during emergencies or price spikes. The key facilities include:
- Pudur: 2.25 million metric tonnes (MMT)
- Visakhapatnam: 1.33 MMT
- Mangalore: 1.5 MMT
