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Sizzling oil worldwide, rising worries in India
The ghost of rising oil prices is back to haunt the economy. Brent crude oil prices are now hovering around $96 per barrel, up more than 30% since 31 May. The recent upward pressure on oil prices is primarily led by supply-side concerns, with Saudi Arabia and Russia deciding to extend their voluntary output cuts till the end of December. When oil prices rise, India tends to feel the heat as we import most of our oil requirements. Costlier oil pushes up the oil import bill, which ultimately weighs on the country’s current account deficit.
But note that other Asian economies are also vulnerable to rising oil prices. “Within Asia, India, Thailand and the Philippines appear more vulnerable to higher oil prices,” said a Nomura Global Markets Research report dated 15 September.
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