Israel Hamas War: Crude oil caught fire due to Israeli attack, prices increased by five percent in one go
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Israel-Hamas War: War between Israel and Palestine ignites global trade (Global Business) has started showing its effect. On one hand, on Monday, BSE Sensex opened with a fall of 400 points in the Indian stock market due to cautious attitude of investors. At the same time, Nifty was also seen trading below 19500. Whereas, on the other hand, tension has emerged in West Asia due to Israel’s attack on Palestine. West Asia is very important in terms of crude oil. One third of the oil is supplied to the entire world from here. Due to this, there has been a five percent jump in the prices of crude oil on Monday. According to Bloomberg report, the war-related premium has returned in the market and due to this West Texas Intermediate has reached near $ 87 per barrel. At 6 am today, WTI crude was at $ 86.39 per barrel. Whereas, Brent crude was also trading at $ 88.13 per barrel. The big thing is that Eastern Europe has been in the grip of war for about one and a half years. Now a new war has started in Western Asia.
Hamas’s worst attack in 50 years
It is being told that Hamas had carried out the most terrible attack in the last fifty years on Saturday. Thousands of women, children and old people have died in this. Along with this, a large number of people have been taken hostage by Hamas. After this Israel declared war. After this, the world was divided into two camps regarding the war. In such a situation, the war does not seem to be ending so soon. However, the rise in crude oil prices in the global market has come at a time when after a long period of rise, prices were beginning to normalize.
What fear haunts the market?
Palestine and Israel were attacked by each other on a daily basis. However, this time the attack is bigger and more terrible. In such a situation, it is understood that Iran may have a role in this attack. It is believed in the market that Iran’s intelligence has direct involvement in the attack on Israel. At the same time, after the attack on Israel, there was a massive celebration in Iran. Besides, Iran has also openly praised Hamas. Whereas, Taliban fighters also want to join this war. He has demanded a way from countries like Iran and Jordan to reach Israel’s border. In such a situation, the market fears that if Iran stops the supply again, the price of crude oil may increase further.
There was also a rise in the price of gold
The demand for gold and silver has increased in the physical market. Due to this, the premium on gold has increased rapidly. Due to this, the price of gold and silver has also increased. It is being told that the premium on gold has increased by seven thousand rupees. Now the premium on 10 grams of gold has become Rs 2,000. Earlier the premium on 10 grams of gold was only Rs 1300. Due to high premium, bullion traders at many places have refused to sell gold. Whereas, the premium on silver has increased by one thousand rupees per kg. At present the premium on silver is Rs 3500. Earlier it used to cost only Rs 2500. Indian bullion traders are facing this problem at a time when the demand for gold has increased in the Indian market. Due to the festive and wedding season, there is a surge in demand every year from October to December. 700-800 tonnes of gold is consumed every year in India. But, out of this only 1 tonne is produced in India. The remaining gold in the country is imported from outside.
What is Moody’s claim regarding the price of oil?
Amidst the attacks by Israel and Palestine, general elections are going to be held in India. In such a situation, despite the rise in the prices of crude oil, there is no possibility of increase in the prices of petrol and diesel due to the general elections to be held next year. This was said in a report by Moody’s Investors Service. Three public sector fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) have kept the prices of petrol and diesel stable for 18 consecutive months. These companies control about 90 percent of the market. This was done despite the increase in crude oil prices last year, due to which these companies suffered huge losses in the first half of the financial year 2022-23. Due to strengthening of international oil prices since August, the profit (margin) of all three retailers has again gone into the negative category. According to Moody’s report, high crude oil prices will weaken the profitability of India’s three state-owned oil marketing companies IOC, BPCL and HPCL. The report said that the three companies will have limited opportunities to increase the retail selling prices of petrol and diesel in the current financial year due to the general elections in May 2024. However, due to weak global growth, high oil prices are not likely to last for long.
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