BackOil alert: Don’t skid
With tensions rising in key oil-producing regions, supplies could suffer, which is why some experts project oil at $100 per barrel soon
PremiumGlobal oil prices have surged to a seven-year high of over $88 a barrel amid rising geopolitical volatility. After a drone attack on an oil facility in the UAE, the Saudi-led coalition launched airstrikes on targets in Yemen’s capital Sanaa associated with Houthi insurgents, who had claimed responsibility for the Abu Dhabi violence. Elsewhere, Russia’s stepped-up troop deployment on its border with Ukraine has fuelled concerns that it could invade the country.
With tensions rising in these key oil-producing regions, supplies could suffer, which is why some experts project oil at $100 per barrel soon. In India, this could upset finance minister Nirmala Sitharaman’s budget math, which will be scrutinized for the balance it’s able to attain on growth priorities versus fiscal-consolidation imperatives. With key state elections due, an inflated oil import bill may not result in retail fuel price hikes for some time. Snips in bloated levies could see to that. But the longer it’s held off, the higher the pressure on our fiscal deficit at a time when the Centre needs to firmly take charge of growth support from our central bank, which must be tasked squarely with keeping the rupee’s value stable internally and externally.
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