As a result of geopolitical tensions in the Middle East and Eastern Europe, global crude oil prices saw a significant rise on Tuesday. On October 16, Brent crude reached the $110 per barrel mark for the first time since May, although it later fell to $109.86. Simultaneously, the American West Texas Intermediate (WTI) index closed at $101.41 per barrel, showing a 3.5% increase. Over the week, WTI rose by more than 10%, while Brent increased by approximately 5%.
Experts express concerns about rising inflation, which is predicted to affect India as well.
This surge occurred against the backdrop of simultaneous threats in key energy corridors, such as the Strait of Hormuz and the Bab el-Mandeb Strait. In the Middle East, Iran attacked Hormuz, creating serious obstacles for commercial shipping and oil transport through these vital sea routes. Furthermore, the Houthis intensified regional pressure by launching missiles at Saudi Arabia, causing concern over the security of major production and export facilities in the region.
Concurrently, the conflict in Eastern Europe triggered a sharp jump in energy markets as Ukraine continued to strike Russian oil refineries. The combination of these events led to a significant increase in oil prices.
Energy analysts note that reaching three-digit crude oil prices puts pressure on global inflation. There is a risk of a sudden intensification of inflationary threats worldwide, which will affect the cost of retail fuel, production costs, and transportation expenses. Markets may remain unstable for a long time.
Experts warn that if oil prices remain at such high levels for an extended period, it could seriously impact India. The cost of gasoline and diesel fuel may rise, and transportation costs will also increase, allowing manufacturing companies to raise prices for their products. Overall, inflation could affect India, as the country imports most of its necessary energy in the form of crude oil.