Global oil benchmark Brent crude surged above dollars 114 a barrel on Friday, touching the highest level since May. The surge came after the Houthi’s attack in Saudi Arabia intensified. The benchmark rose nearly 5 percent in the past two days and the U.S. WTI crude traded above $100. Brent crude has recorded third weekly surge with the latest spike.
Last Friday, it touched $110 for the first time since May. Ship attacks in the Hormuz and Houthi strikes in Saudi Arabia are driving the rally, and emergency supply funds by the IEA and the United States did not remove the uncertainty.
India, which imports most of its crude, is reeling the ripple effect. State-run refineries have been showing, has been facing high pressure on maintaining the supply. As of October 15th, a global investment bank noted loss at Rs26 a liter on petrol and Rs 30 on diesel, with procurement cost for BPCL, HPCL and IOC already at $125 a barrel.
Fuel prices across major cities stayed largely unchanged as of October 21st. Private retailers have moved up, Jio BP raised petrol by Rs 5 and diesel by Rs 3 a liter from October 11th after a similar hike by Nayara Energy.
The Indian rupee, on the contrary, closed at 94.94 against the dollar on Friday. Analysts say it could touch 100 in a few months if the Brent reaches $120, and the currency could continue to stay under pressure. According to estimates, every dollar-10 rise in crude costs the Indian economy $12 billion to $15 billion, or 0.4 to 0.5 percent of its GDP.