‘India will handle it maturely’ Union Petroleum Minister Hardeep Singh on rising crude price

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India said on Monday that it is closely monitoring the ongoing war between Israel and Hamas and that it will handle its energy demands with maturity. “India will handle it maturely. In terms of the energy sector, the location of the activity is, in many ways, the center of global energy. “We will keep a close eye on things,” Union Petroleum Minister Hardeep Singh Puri told reporters in New Delhi.

“We will navigate our way through this. These kinds of uncertainties only encourage people to sustainable and cleaner fuel,” Puri added. Global crude oil prices moved in the northward direction on Monday, following the Israel-Hamas war that entered Day 3 with large fatalities on both sides.

Brent crude, often considered the global benchmark, soared as high as about 5 per cent before some correction. At present, it is trading 2.53 per cent higher at USD 86.75 per cent. The WTI variant too was similarly high.

“Oil prices rose more than 4 per cent in early Asian trading on Monday as Hamas attack on Israel threatened to inflame tensions in the Middle East, the source of around a third of the world’s crude…,” Ravindra V.Rao, CMT, CFTe, EPATian VP-Head Commodity Research, said.

“The fallout in markets will likely be determined by whether conflict spreads to the rest of the Middle East region, with oil traders also shifting focus to Iran, which is both a major oil producer and supporter of Hamas,” said Deepak Jasani, Head of Retail Research, HDFC securities.

Meanwhile, OPEC will likely issue its annual World Oil Outlook on Monday, providing updated forecasts for long-term demand and supply. For India particularly, which is a large importer of crude oil from various sources, this latest price pressure on energy prices will likely be a dampener.

On Friday, the Central Bank RBI showed utmost concern is the rising inflation and its attached potential risk to the growth outlook. The overall inflation outlook, RBI cautioned, is clouded by uncertainties from the fall in kharif sowing for key crops like pulses and oilseeds, low water at key reservoirs, and volatile global food and energy prices.

RBI Governor Shaktikanta Das said the central bank is concerned and it has identified high inflation as a major risk to macroeconomic stability and sustainable growth. Since the war between Russia and Ukraine broke out in February 2022, there has been a consistent rise in energy prices.

India has been buying large quantities of crude oil from Russia and other possible sources and it has on several occasions maintained that its oil imports will be determined by its national interest and keeping in mind its large consumer base.