Oil prices can climb down to $100 per barrel depending upon Ukraine crisis, says energy expert Narendra Taneja
According to him, India should be preparing for some relief, may be back to $100 per barrel in the very near future.
- Jun 16, 2022,
- Updated Jun 16, 2022 4:59 PM IST
Global and Indian economies are scrambling against each other to tame inflation and the big pain point for all developing nations is the volatility in the crude oil market. Narendra Taneja, leading energy expert, is of the opinion that if Russia-Ukraine crisis is brought under control then we can witness prices going down to $95-$105 per barrel for some time.
“If Ukraine situation does not escalate and [is] brought under control then we will see oil prices to come down to may be around $95 per barrel to $105 per barrel for some time. But when you look at medium to long term, given the situation, when sufficient investment has not gone in oil exploration production, the oil prices are going to move in one direction that is north so we may get some relief if there is some solution to Ukraine crisis but then that is not sustainable,” Taneja said.
According to him, India should be preparing for some relief, may be back to $100 per barrel in the very near future.
“In medium to long term the prices would be around $100-120 per barrel. May be in 2-3 years from now we will have oil prices in the range of $120-140 per barrel on a sustained basis,” Taneja said.
Taneja dubbed structural deficit as the most prominent reason for the volatility in the oil market.
“We saw that during the COVID and before [that], investments in oil explorations and productions have gone down substantially, they decided to put their exploration and production plan on hold, suspended or withdrew, that is also a reason for this volatility,” Taneja mentioned.
Taneja sees next one year as very challenging for India. He believes India is more vulnerable because India’s dependence on imported oil is the highest, especially amongst large emerging economies, to the tune of 85 per cent, which is the highest in the world.
“So one year for the Indian economy is going to be very challenging because we are the oil economy. If we cut imports even then it’s a big challenge then the growth will suffer and if rupee depreciates at the same time, then I think the challenge will get even bigger,” Taneja clarified.
In which direction oil prices are heading to, that is something time will tell but till then one thing is clear that volatility in crude oil market is going to pose a formidable challenge for the Indian economy.
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Global and Indian economies are scrambling against each other to tame inflation and the big pain point for all developing nations is the volatility in the crude oil market. Narendra Taneja, leading energy expert, is of the opinion that if Russia-Ukraine crisis is brought under control then we can witness prices going down to $95-$105 per barrel for some time.
“If Ukraine situation does not escalate and [is] brought under control then we will see oil prices to come down to may be around $95 per barrel to $105 per barrel for some time. But when you look at medium to long term, given the situation, when sufficient investment has not gone in oil exploration production, the oil prices are going to move in one direction that is north so we may get some relief if there is some solution to Ukraine crisis but then that is not sustainable,” Taneja said.
According to him, India should be preparing for some relief, may be back to $100 per barrel in the very near future.
“In medium to long term the prices would be around $100-120 per barrel. May be in 2-3 years from now we will have oil prices in the range of $120-140 per barrel on a sustained basis,” Taneja said.
Taneja dubbed structural deficit as the most prominent reason for the volatility in the oil market.
“We saw that during the COVID and before [that], investments in oil explorations and productions have gone down substantially, they decided to put their exploration and production plan on hold, suspended or withdrew, that is also a reason for this volatility,” Taneja mentioned.
Taneja sees next one year as very challenging for India. He believes India is more vulnerable because India’s dependence on imported oil is the highest, especially amongst large emerging economies, to the tune of 85 per cent, which is the highest in the world.
“So one year for the Indian economy is going to be very challenging because we are the oil economy. If we cut imports even then it’s a big challenge then the growth will suffer and if rupee depreciates at the same time, then I think the challenge will get even bigger,” Taneja clarified.
In which direction oil prices are heading to, that is something time will tell but till then one thing is clear that volatility in crude oil market is going to pose a formidable challenge for the Indian economy.
Also Read: EXPLAINED: How to zero in on a stock to buy? Follow these 4 basic steps
Also Read: Samsung’s C-Lab carves out 59 start-ups in the last decade