New Delhi: According to a research by broking firm Prabhudas Lilladher, crude oil prices have increased significantly as a result of the ongoing turmoil in West Asia and are not anticipated to revert to the previous level of $65 per barrel very soon. According to the research, price increases are probably going to continue, keeping India's import cost high for the upcoming months.According to the research, "we think crude prices are unlikely to return to pre-Gulf war conflict levels of USD65/barrel."

Every day, India purchases about 4.3 million barrels of crude. That comes to almost $180 billion annually. According to Prabhudas Lilladher, India's oil import bill could increase by more than $70 billion annually due to the current high prices. "The current spike in crude prices is likely to inflate India's import bill by more than USD70bn/annum," the report stated.
The Strait of Hormuz transports almost 20% of the world's crude oil. "Shipping route from Strait of Hormuz is critical for maintaining oil prices within a comfortable range and this remains a big uncertainty as of now," the research stated. "Further escalation of hostilities and any impact on Bab Al-Mandeb can further squeeze oil supplies and push prices up."The broking pointed out that the conflict has affected more than only routes and tankers. Numerous oil and natural gas refineries throughout the world have been damaged. Fixing these is difficult. "Several global natural gas and oil refineries have been destroyed and would take quite a bit of time to come back to stream/normalise operation," the report stated. Prices remain high when supply is affected and rebuilding takes time.
Freight rates, insurance premiums, and tanker availability have all increased and are probably going to stay at these levels for some time, even if tensions between the US and Iran do not worsen. "There has been spike in costs of freight, Insurance and availability of tankers," the report stated.

Even before oil reaches India, these raise its final price. Customers' suffering was postponed earlier when the government reduced excise duty by Rs 10. However, the cost of LPG and aviation fuel has already increased several times. According to the broking, increases in petrol and fuel prices are inevitable after state elections.
India will attempt to purchase additional petrol and oil from other nations in order to deal with the shock. "We expect India to diversify its imports sources with higher imports from US, Russia, Norway, Australia etc. for both crude oil and Gas," the research stated. In a few weeks, supply channels might change, but overall prices are predicted to remain high.The broking did point out that India's reliance on oil has decreased. Ten to fifteen years ago, imports of petrol and oil accounted for 6.8 to 7.3% of GDP. They currently make up about 3.8% of GDP. Therefore, this price increase will have less of an impact than previous oil shocks. It won't be painless, though. "We expect second level impact of higher crude prices to affect inflation, demand and manufacturing in the coming months."
The article went on to say that the war damaged refineries, disrupted the supply chain, and increased the risk and cost of shipping. It will take months to resolve all of that, even if there is peace.