New Delhi, June 24: International crude oil prices declined sharply and reached a four month low as tensions in West Asia eased and diplomatic efforts between the United States and Iran showed progress.
Brent crude, the global benchmark, traded near 76 dollars per barrel on Wednesday, while US West Texas Intermediate remained around 72 dollars per barrel. Both benchmarks recorded a decline of more than one percent in a single trading session.
Crude Oil Prices Bring Relief for Import Dependent India
Over the past month, Brent and WTI prices have fallen by more than 20 percent, reversing earlier gains driven by concerns over supply disruptions.
At the height of the Iran related tensions, markets feared interruptions in crude movement through the Strait of Hormuz, one of the world’s key oil transit routes.
However, recent signs of stability and reports of oil tankers preparing to resume movement in the Gulf region have improved market sentiment.
Progress in diplomatic engagement involving the United States, Iran and regional stakeholders has also reduced concerns over global supply shortages.
As expectations of uninterrupted supply strengthened, pressure on oil prices increased and global energy markets began to stabilise.
The fall in crude oil prices is expected to benefit India significantly because the country imports a major portion of its crude oil requirements.
Lower oil prices may reduce import costs and provide some relief from inflationary pressures across sectors, according to market expectations.
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