Industry Odisha Bureau, April 22: Even though US President Donald Trump has announced an extension of the ceasefire with his bête noire Iran following which the global oil prices reportedly traded low today (April 22), the prolonged closure of the critical chokepoint-Strait of Hormuz- imposed by irate Iran along with the tit-for-tat stance of naval blockade slapped by the enraged US regime still remains a nagging problem that has not yet relieved the worrisome supply chain disruptions.
While the initial ceasefire announced by Trump was of two-week duration that expired yesterday (April 21), the extension from today (April 22) has reportedly no deadline yet.
Owing to the supply-chain risks, the decline in crude oil prices has not been reportedly soothing as the oil-importing nations like India are still bearing the brunt of the threat and shock of the oil price volatility.
As per reports, “One-fifth of the global oil and gas supplies have been cut off” owing to the closure of the Strait of Hormuz for over 50 days since the conflict broke out. Thus, India has been suffering a lot, because 60 per cent of its crude oil imports, 50 per cent of its liquefied natural gas (LNG) and 90 per cent of its liquefied petroleum gas (LPG) imports are reportedly dependent on the Hormuz shipping route.
Experts opined that supply chain disruptions along with the price volatility of crude oil put a paramount pressure on India’s macroeconomic scenario, because it “raises India’s annual import bill by Rs 16,000 crore if the increase in oil prices at the rate of $1 per barrel stay put for a year”.
As per media reports, “The Indian basket price of crude stood at $103.05 per barrel as of 20 April. Its average price so far in April is $116.91 per barrel.”
Need to be mentioned here that, the Indian basket means: “A mix of Sweet grade (Dated Brent) and Sour grade (Oman and Dubai Average)”.
Notably, “Sweet crude oil is a high-quality, low-sulfur petroleum containing less than 0.5% sulfur. It is highly valued for refining into gasoline, diesel, and jet fuel because it is less corrosive, requires less processing, and has a lower environmental impact than high-sulfur sour crude”.
On the contrast, “Sour grade crude oil is petroleum containing high levels of sulfur (typically 0.5% by weight) and, often, hydrogen sulphide. It is generally more viscous, heavier (lower API gravity), and less expensive to purchase than sweet crude. However, it requires complex, costly desulfurization refining processes, making it harder to process into products like gasoline and diesel”.
Also Read :- Hormuz-Halted Energy Crunch: Is India Mulling To Blend CBG Into CGD Like Ethanol With Auto Fuel?
