NEW DELHI: Crude oil prices spiked again on Friday after a missile attack on an Iranian tanker heightened concerns over military escalation in the West Asian region.
But, while Brent crude crossed the $60 per barrel mark soon after the attack, the International Energy Agency’s forecast of significantly lower oil demand due to weakening economic activity this year pulled prices back down again.
According to market data, Brent crude (which forms a significant portion of the Indian crude oil basket) shot up 2% on the spot market, going from $59.53 per barrel to $60.65 a barrel after Iranian news agencies reported that a National Iran Tanker Company tanker had been attacked by missiles near the Saudi Arabian port of Jeddah.
“Coming after the recent drone attacks, the market reaction was expected,” said a senior executive with a state-run oil firm.
Which way crude oil prices trend is critical for India, which imports 80% of its crude oil needs. A $1 rise in crude price could mean a $1.5-2 billion increase in India’s annual import bill.