China Builds Oil Reserves Amid Iran-Israel War, India May Face $100 Crude Risk
· Free Press Journal
Mumbai: The ongoing conflict between Iran and Israel has increased uncertainty in global energy markets. Continuous attacks and counter-attacks between both nations have raised fears of supply disruptions in the Middle East, a region that plays a crucial role in global oil production.
Following the escalation, crude oil prices have started moving upward. Experts warn that if tensions continue or shipping routes are affected, global oil prices could rise sharply in the coming weeks.
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Amid rising geopolitical tensions, China has taken advantage of the situation by purchasing large quantities of crude oil at discounted prices. Being the world’s largest oil importer, China has recently increased imports from Russia, Iran and Saudi Arabia.
According to analysts, China has significantly expanded its strategic oil reserves over the past year. Estimates suggest the country now holds more than 1.3 billion barrels of crude oil - enough to meet domestic demand for several months.
Crude Oil Jumps After Iran Naval Drill Near Strait Of Hormuz, WTI At $64 & Brent Below $69 Amid Global TensionsBy buying oil when prices were relatively low, China has protected itself from future price shocks. If global crude prices rise to $100 per barrel or higher, China can either use its cheaper stored oil or sell it later at higher prices, generating strong economic gains.
Why India could face bigger challenges?
India, unlike China, depends heavily on imported oil for its energy needs. More than 85 per cent of India’s crude oil requirement comes from overseas markets, much of it transported through the sensitive Strait of Hormuz route.
Crude Oil Jumps After Iran Naval Drill Near Strait Of Hormuz, WTI At $64 & Brent Below $69 Amid Global TensionsCurrently, Brent crude prices are trading around $72–73 per barrel. However, experts believe that prolonged conflict or disruption in supply routes could push prices to $100–110 per barrel.
Higher crude prices directly impact India’s economy. Petrol, diesel and cooking gas prices may rise, increasing transportation costs. This could make essential items such as vegetables, grains and daily goods more expensive.
As a result, inflation pressure may increase, putting additional financial burden on common households in the coming months.