New Delhi, March 5 || Amid escalating Middle East tensions, crude oil prices went up more than 2 per cent on Thursday over supply constraints as Strait of Hormuz was closed by Iran.
In the early morning trade, the April contract of the benchmark crude on the Intercontinental Exchange was trading at $83.26 per barrel, up by almost 2.43 per cent from its previous close.
The April contract of West Texas Intermediate on the NYMEX went up 2.63 per cent to $76.63 per barrel.
According to reports, a container ship transiting the Strait of Hormuz was struck by a projectile, damaging the vessel.
A continuous increase in oil prices would impact India’s import bill. An increase of $1 per barrel of oil for an entire year increases import bill by around Rs 16,000 crore.
Meanwhile, India is in a reasonably comfortable position as far as crude oil, LPG and LNG are concerned, with a stock of 25 days of reserve for crude and 25 days of products including the quantity that is in transit on ships headed for the country’s ports, according to government sources.
India imports over 85 per cent of its crude oil requirement of which around 50 per cent is supplied by Middle Eastern countries through the Strait of Hormuz, flows from which have been disrupted following the Iran war.
However, India has diversified its oil sources by increasing imports from Africa, Russia as well as the US and building resilience through strategic reserves.