How Will The Oil Price Surge Impact The Indian Economy?

Russia and Ukraine’s missile exchange caused International crude oil prices to spike 2% on Thursday, November 21. The last time Brent crude prices rose from $1.04 (1.4%) to $73.85. 

The WTI (West Texas Intermediate) recovered $1.46 (2.1%) to $70.22. This week, WTI gained 4.8%, while Brent Crude went up 1.8%. Crude oil traded 1.49% higher at $70 per barrel on the MCX (Multi-Commodity Exchange). 

Analysts said the crude oil rally was caused by the Russia-Ukraine war. This led to a surge in natural gas prices in Europe. 

The major risk is if Ukraine targets Russian energy infrastructure, while how Russia will respond to those attacks is another concern. Amid all this, China has announced policy measures to boost trade, including support for energy imports. 

The Trump factor was expected to soften crude prices, which would have benefited India. Now, everything has turned upside down. Due to the higher price, India will face new challenges like higher import expenditure and greater inflation, poor profit margins for Industries, and lower performance in the Indian stock market.