Crude Oil Price Today: Brent Nears 90 Dollars as Hormuz Uncertainty Raises Global Oil Supply Concerns

New Delhi: Amid the ongoing tension between America and Iran, crude oil prices are once again rising. On Wednesday, Brent crude reached the level of around 90 dollars per barrel. The biggest concern in the market is regarding the Strait of Hormuz. Iran has indicated that this important sea route will not be reopened until America's conditions are met. This has increased uncertainty regarding oil supply.

How much did Brent crude reach on Wednesday?

On Wednesday, Brent crude futures were up by about 0.57% and reached $89.47 per barrel. A day before this, on Tuesday, Brent had increased by 1.36% and closed at $88.91 per barrel.

At the same time, American WTI crude also rose 1.3% on Tuesday and closed at $83.20 per barrel. Oil prices have increased by more than 6% so far this week.

Why did the oil market worry about Hormuz?

The biggest reason for the rise in oil prices is the uncertainty regarding the Strait of Hormuz. Senior Iranian security official Mohsen Razai has said that Hormuz will not be opened to shipping unless the US accepts Iran's conditions.

According to reports, Iran is also demanding unfreezing of its assets stashed abroad. Hormuz is one of the world's major oil transportation routes, so the fear of movement being affected here for a long time has increased the market's concern.

Is there still hope for a deal between America and Iran?

There are still different signals in the market regarding the possibility of an agreement between America and Iran amid tensions. Pakistan's Defense Minister Khawaja Asif told Bloomberg that circumstances once again appear to be moving in the direction of a peace agreement.

However, due to the ongoing tension on sea routes and differences over terms between the two countries, the market is not yet completely confident about any possible deal.

What will be the impact of expensive crude oil on India?

India is dependent on imports for a large part of its oil needs. In such a situation, if the price of crude oil remains high in the international market for a long time, the country's import bill may increase. This may also affect inflation.

Due to oil becoming expensive, the possibility of change in the prices of petrol and diesel may also increase in the coming time. However, the price of domestic fuel is not decided only on the basis of international crude. It also includes many other factors like taxes, refining costs, freight and rupee-dollar exchange rate.

What factors determine the price of petrol and diesel?

International crude oil definitely affects the retail price of petrol and diesel in India, but this is not the only reason. Taxes, refining margins, transport and distribution expenses of the central and state governments also affect the price.

Apart from this, the position of rupee against dollar is also important. Therefore, it is not necessary that the effect of crude becoming expensive in the global market be immediately visible in the same proportion on the prices of domestic petrol and diesel.