Tensions around high crude oil prices have eased as price goes below $100 per barrel

• After touching almost $140 per barrel, the highest in 14 years, crude oil prices have cooled down on easing Russia-Ukraine crisis and resurgence of COVID-19 cases in China.
• One of the biggest concerns -- high crude oil prices-- for the Indian economy has finally come under control.
• The drop in crude prices in the international market is a big relief for India as it imports 85% of its oil demand.

After a sharp rise in crude oil prices for a couple of weeks, which shook the Indian economy to its core, it is finally inching down.

Crude oil prices had gone up to $140 per barrel, the highest in 14 years after Russia invaded Ukraine. Now that the war between the two European nations is cooling off, oil prices have eased. Fear of major oil disruption from one of the biggest oil producers, Russia, had spiked up the prices.

A Ukrainian negotiator reportedly said on Tuesday that talks with Russia on a ceasefire and withdrawal of Russian troops from Ukraine are ongoing.

Moreover, resurgence of COVID-19 cases in China is another reason for the fall in prices of the commodity. This is because China is amongst the world’s largest oil importer and a new lockdown in the country may slow down oil demand and eventually reduce oil prices.

The fall in crude oil prices is good news for the Indian economy as the country imports 80% of its oil needs and any rise in oil price increases the import bill.

Equity markets are also cheering the moment as concerns around the Indian economy and heightened oil inflation have eased.

February 24 was when the markets witnessed one of the biggest crashes, which wiped out $177 billion from the Indian market because of the Russia Ukraine war and crude oil price crossing $100 a barrel.

On March 16, India’s benchmark indices Sensex and Nifty 50 rose more than 1% today as a fall in crude oil prices was a big relief.

Despite the wide fluctuations in crude oil prices, fuel prices in India did not rise as five states were undergoing elections. However, now that the elections are done and oil prices are under control, it is to be seen if the government will hike prices or not.

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