Oil prices topped $110 in the aftermath of western sanctions that are driving away financiers and traders from Russian oil and creating global supply worries.
Crude oil futures touched $113 per barrel during the day, the highest since July 2014, as the market ignored the decision by key consumers to release 60 million barrels of oil from their emergency reserves, or 2 million barrels a day for 30 days, to meet any shortfall emerging from Russian supply curbs. Withcrude exports of about 5 million barrels per day, Russia is the second-largest oil exporter after Saudi Arabia. While wester n sanctions haven’t directly targeted the energy sector, markets are expecting banking restrictions to strangle energy supplies at a time OPEC+, the producer club led by Saudi Arabia and Russia, is unwilling as well as unable to raise output significantly.
Unprecedented sanctions have deepened uncertainties for the global economy as well as for India.
India depends on imports for 85% of its oil needs and is recovering from the pandemic induced economic recession.