The long-running tension in West Asia is now over. US President Donald Trump and Iranian President Masoud Pezeshkian have signed an important agreement to end the conflict that has been going on between the two countries for several months. According to American and Iranian officials, both the leaders signed this agreement on Wednesday and this agreement has come into effect with immediate effect. Its biggest impact is being seen on the prices of crude oil.
There has been a sharp decline in the prices of crude oil in the last few days, due to which the hope of getting relief to big oil importing countries like India has increased. Experts believe that if the situation remains normal then the old oil business relationship between India and Iran can once again become strong.
Crude oil prices fell sharply
During the war, the price of Brent crude had reached $ 138 per barrel, whereas this morning Brent crude was seen trading around $ 77.93 per barrel and WTI crude was seen trading around $ 74.90 per barrel. Oil prices have fallen by about 18 percent in just four days.
India-Iran oil trade may pick up pace again
In 2019, after US sanctions, India had to stop buying oil from Iran. Earlier, India used to import about 3 lakh barrels of Iranian crude oil daily and Iran was among the major oil suppliers of the country. Now, if the situation becomes normal, Indian refinery companies can buy Iranian oil again. Due to this, India can get cheaper crude oil as well as see a big reduction in shipping and transportation costs.
These 6 sectors can get the biggest benefit
- Aviation Sector: A major part of the expenditure of airlines companies is on Aviation Turbine Fuel (ATF). Due to cheap oil, the expenses of airlines will reduce and profits may increase.
- auto sector: Reduction in fuel prices will reduce the cost of driving. This is likely to increase the demand for automobiles.
- Oil Marketing Companies: Companies like IOC, BPCL and HPCL can directly benefit from cheap crude oil.
- FMCG Sector: Margins of FMCG companies may improve due to lower raw material and transportation costs.
- Paint and Chemical Industry: Due to falling prices of petroleum based raw materials, the production expenses of paint, chemical and adhesive companies will reduce.
- Logistics and Shipping Sector: Reducing freight costs can improve the earnings and operational efficiency of logistics companies.
Indian economy will get strength
Fall in oil prices will reduce India’s import bill, pressure on inflation will reduce and the rupee may also strengthen. This is why the market is seeing this peace agreement not just as a diplomatic success but also as a good news for India’s economy.
Also read- The war that has been going on for months finally ends, deal signed between America and Iran, agreement comes into effect with immediate effect.
