Urja Khabar
Kathmandu: The price of crude oil has crossed $100 per barrel in the international market, taking the price to a six-week high as the war between the US and Iran escalates recently.
According to Reuters, an international media, oil price topped US $100 a barrel on Wednesday for the first time in six weeks. “It is due to an escalation in fighting by U.S. and Iranian forces deepened concerns over supply from the region and raised fears of inflationary pressures and higher energy costs for consumers and businesses,” Reuters reports.
Of late, attacks on oil refineries and ships in West Asia have increased the risk of disruption to global supplies. Concerns about a supply crisis have increased in the market as oil shipments through the Strait of Hormuz have been affected due to the war.
Before the war, the Strait of Hormuz carried about 20 percent of the world's oil supplies. The latest conflict has seen major fluctuations in oil prices as most shipments on the route have been stopped.
Oil prices started to take an upward graph sharply after the US and Israel launched a war against Iran on February 28. Over the period, the price of Brent reached about $120 per barrel, which however pacified a few months before to about $70 on hopes of a peace agreement.
Of late, it has been reported that the US military destroyed five Iranian oil tankers and the Iran-backed Houthi group attacked Saudi Arabia's oil infrastructure. The latest attacks by Yemen’s Houthi group have raised the risk of disrupting alternative oil transportation routes, putting further pressure on global oil supplies already stretched by the war.
The increase petroleum prices in the international market have raised a risk of price hike in Nepal’s market. After the war started, petrol price climbed to as high as Rs 219 from Rs 157 per liter. Likewise, diesel price had also escalated to Rs 237 from Rs 142 per liter. Since last month, the prices of petrol and diesel have come down to Rs 200 and Rs 195 per liter, respectively, in domestic market.
Rising oil prices have raised concerns about rising inflationary pressures around the world. With recently escalated war, the average price of regular gasoline in the United States reached $4.22 a gallon on Wednesday. The rate is about 42 percent more than the $2.98 it was before the war, while diesel prices hit $5.94 per gallon.
