The present oil surge wouldn’t final and prices are possible to drop to $100 per barrel inside two weeks, Bharat Petroleum Corp (BPCL) chairman has stated, including that there was no need for India to panic. “Russian oil and gas exports are not going to be blocked unless Russia itself decides to do so, which is unlikely,” BPCL chairman Arun Kumar Singh informed ET.
He stated Europe can be unlikely to cease importing power from Russia, one of many world’s largest exporters of oil and fuel.
Crude oil prices soared to $139 per barrel on Monday after US Secretary of State Antony Blinken stated the US and European allies are contemplating banning the import of oil from Russia. Prices eased a bit after Germany, the most important client of Russian crude in Europe, rejected any such plan.
Russia has warned that rejection of its oil could be “catastrophic” for the worldwide oil market and prices could rise to $300 per barrel. Oil is up almost $30 per barrel since Russia launched the invasion of Ukraine and is presently buying and selling round $127.
BPCL’s Singh stated oil prices would quit the latest speculative positive factors rapidly and fall to $100 per barrel in two weeks. It can fall additional to $90 as soon as the battle concludes, he stated. “There is no need for us to panic. We should just weather it out,” Singh stated, including that the prices had been unsustainable. “World cannot afford the current prices. The global economy will slow down and there will be a correction in demand for crude,” Singh stated. Sustained excessive prices can destroy 2-3% of worldwide oil demand, which is about 2-3 million barrels per day, he stated. This compares with Russia’s export of 5 million barrels per day of crude.
The contract for two Russian oil cargoes for April supply to BPCL is being honoured, signalling an absence of provide problem, Singh stated.
BPCL sources Russian cargoes from the spot market.
Indian refiners normally supply 30-40% from the spot market and the steadiness underneath long-term offers with producers.
They additionally normally maintain not less than a month of stock.
Crude is already lined up for processing in April, Singh stated. Add to this a month of stock and refiners are secure till May in phrases of their crude wants.
State-run refiners need to enhance home gas prices by Rs 12-15 per litre to align them with worldwide charges after conserving them static for greater than 4 months due to meeting elections in 5 states, in accordance to business sources.
With the conclusion of voting, prices are anticipated to go up. The hikes will possible be gradual as firms might want to guard customers towards the volatility in the worldwide market. Economists worry a full pass-through of gas prices could ratchet up inflation and inflationary expectations, hurting the financial restoration.