NEW DELHI: As the US and European countries are mulling to ban Russian Oil imports, the Brent Crude Oil on Monday touched $139.13 per barrel for a brief period. The Brent crude was trading at $139.13 while the West Texas Intermediate (WTI) hit $130.50 on Monday.
The price has been on rise ever since Russia started military operation in Ukraine on 24 February, and it rose around 33% per barrel. Experts believe the price is going to hike further and may soon breach the all-time low level reached in 2008 due to economic depression. The all-time high of $147.50 per barrel crude price was reported in July 2008.
At home, the hike in international price is going to widen the current account deficit and may widen by $14-15 billion (0.4% of GDP) for every $10/bbl rise in the average price of the Indian crude basket.
As per a rating agency ICRA, if the price averages $130/bbl in FY2023, then the current deficit will widen to 3.2% of GDP, crossing 3% for the first time in a decade.
“We expect the Indian current account deficit to widen to 3.2% of GDP in FY2023 if the crude oil price averages $130/bbl, crossing 3% for the first time in a decade. We expect the $-` cross rate to trade in a range of 76.0-79.0/$ until the conflict subsides. Moreover, the 10-year G-sec yield is likely to range between 7.0-7.4% in H1 FY2023, with the looming increase in supply,” said a report by ICRA.