Historic fall of 17% in crude oil due to Trump’s announcement, prices fell below $95; Will petrol and diesel become cheaper now?:

New Delhi/New York | The biggest relief news of this time is coming out from the Global Energy Market. The announcement of ceasefire amid the weeks-long US-Iran tension has led to a sharp decline in crude oil prices. On Wednesday, April 8, a huge fall of 17% was recorded in the prices of crude oil in the international market, due to which the prices of both Brent crude and American crude (WTI) have come down to the ground.

Trump’s ‘peace declaration’ and the miracle of opening the Strait of Hormuz

In a major development, US President Donald Trump has put on hold for 2 weeks the decision to bomb Iran’s civilian infrastructure. Trump informed on ‘Truth Social’ that an agreement has been reached on disputed issues with Iran. Under this agreement, Iran has agreed to immediately and safely reopen the Strait of Hormuz. Let us tell you that about 20% of the world’s oil passes through this route, the fear of its closure had sent the prices sky high.

US crude slipped below $95, market scared due to recession

Heavy selling was seen in the market with the news of ceasefire. The prices of West Texas Intermediate (WTI) i.e. US crude fell by 17% directly to the level of $ 95 per barrel. At the same time, Brent crude, which closed at $ 109.5 in the last trade, is now expected to fall significantly. Experts believe that if the next round of talks to be held in Islamabad on April 10 is successful, the prices may go down further.

Will the global supply chain improve so soon?

Even though prices have fallen, experts believe that it will take time for the physical supply system of oil to get back on track. “It could take months to restart clogged wells and reroute ships,” according to Robert Rennie of Westpac Banking Corp. In such a situation, it seems difficult for Brent crude to remain stable below $90-$95. Oil production is expected to be affected by 9 million barrels per day in April due to cuts in shipments from the Middle East.

Why is it important for India to have cheap crude oil?

This fall in crude oil prices is like a lifeline for emerging economies like India. Due to increase in oil prices, India’s Current Account Deficit (CAD) increases and the rupee starts weakening. If crude remains cheap in the international market, then the way can be cleared for reduction in the prices of petrol and diesel in the domestic market, which will provide great relief to the people struggling with inflation.