Tension between Russia and Ukraine shows no signs of abating. Now Russia has further escalated its current attack on Ukraine. On November 21, when Russia attacked the city of Dnipro in Ukraine with the RS-26 Rubaz intercontinental missile. This incident not only deepened the conflict between the two countries, but also created a stir in the global energy markets. The Ukrainian Air Force has confirmed that Russia carried out this attack in a planned manner.
Crude oil prices rose
After this attack, there was an increase in crude oil prices in international markets. On Thursday, Brent crude futures rose 0.4% to $73.09 per barrel, while U.S. West Texas Intermediate crude futures also traded at $69.03 per barrel. Geopolitical tensions and concerns about supply disruptions boosted prices.
What will be the effect?
Rising oil prices are a cause of concern for countries dependent on energy imports, such as India. India imports most of its energy needs, which is directly affected by fluctuations in the global oil market. High crude oil prices can not only increase the trade deficit but also the inflation rate. Russia is India’s largest oil supplier, so any disruption in supply can have a profound impact on India’s energy security.
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Another shock to the oil market may come from the upcoming OPEC+ meeting. The Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia could postpone the plan to increase production at the meeting to be held on December 1. OPEC+ had previously planned a modest production increase in 2024 and 2025, but declining global oil demand and production increases in other countries have made this plan difficult.
Why India came under stress?
The increase of 5,45,000 barrels in crude oil reserves in America is also affecting prices. This reserve has reached 43.03 crore barrels. Analysts expected a smaller increase, but the unexpected increase in storage has complicated the market situation. The war between Russia and Ukraine and recent developments in the oil market could have a major impact on global energy supplies and prices. This situation may further increase economic challenges for countries like India. It will be important to pay attention to the OPEC+ meeting and the geopolitical events in the coming weeks.
