By Admin 
Saudi Arabia Crude Oil: Saudi Aramco, the world’s largest oil exporter, has made the biggest cut in the price of crude oil for Asian countries in 26 years. The price of Arab light crude to be delivered in August has been reduced by $ 11 per barrel. Now this oil will be cheaper by $ 1.50 per barrel than the Oman-Dubai benchmark.
This is not just a decision of Saudi Arabia, but it can also affect countries like India, because India buys more than 85% of its crude oil requirement from abroad.
Why did Saudi make oil so cheap?
The biggest reason for this is the increasing supply and decreasing demand in the market. After the tension between America and Iran subsided, the supply of oil from the Strait of Hormuz has started normalizing. This increased the availability of oil in the market and put pressure on prices.
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On the other hand, China, which is the world’s largest oil importer, has been buying less oil from Saudi for the last two months because it is getting cheaper oil from Russia and Iran. In such a situation, Saudi reduced the prices to attract customers back. Along with this, OPEC Plus has also decided to increase production for the fifth consecutive month, which means more oil will come in the market.
Why is this news important for India?
India imports most of its crude oil needs and Gulf countries, especially Saudi Arabia, have a major stake in it. If the oil received from Saudi becomes cheaper then India’s oil import bill may reduce. Government oil companies like Indian Oil, BPCL and HPCL will directly benefit from this, because they will get crude oil at a lower price than before.
Will petrol and diesel become cheaper?
At present there has been no official announcement, but if the prices of crude oil remain low for some time then there may be a possibility of reducing the prices of petrol and diesel. However, the final decision will be taken only by the oil companies and the government. Companies may also want to compensate for their past losses first.
Impact on air travel and LPG also
Cheap crude oil is not limited to petrol and diesel only. If crude remains cheap then there may be relief in the prices of Aviation Turbine Fuel (ATF). This may also impact air fares in the future.
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Apart from this, the cost of LPG import can also reduce. Keeping crude oil cheap can also reduce the pressure on inflation because oil prices affect the cost of many essential commodities.
What to look forward to?
At present, Saudi has only cut its official selling price (OSP). The real benefit to India will depend on what level the prices of Brent and Dubai crude remain in the coming days. If the supply from Hormuz remains normal and OPEC Plus continues to increase production, then crude oil may become cheaper. But if tensions increase again in West Asia, prices may go up again.
At present, it is certain that due to this big cut by Saudi, the hope of getting relief for big oil importing countries like India has increased.