Brent crude futures rose USD 2.15, or 2.2%, to USD100.07, while U.S. West Texas Intermediate crude was up USD 1.70, or 1.83 per cent, at USD 94.73 a barrel, according to media reports.
The development comes amid the reescalation of tensions between the US and Iran.
Also read:Will rising oil prices impact India?
The rise in crude oil prices if sustained, will impact on India, which imports most of its requirements. India imports 85 per cent of its crude oil requirements. India has significantly diversified its sources of crude oil imports. Over the past decade, the number of countries from which the country imports crude oil has expanded from 27 to more than 40.
Also read: Inflation and Oil Nexus
A 10 per cent rise in global crude oil prices may result in an increase in inflation by 30 basis points and GDP growth may be negatively impacted by around 15 basis points. A USD 10 per barrel increase in crude oil price will increase India’s current account deficit by 0.3 per cent of the GDP. It is said that the crude prices should remain over USD 100 per barrel for a sustained period to reflect its impact on the economy.
