America and Western countries have imposed many types of sanctions on Russia. He did this in response to Russia’s attack on Ukraine. Due to this the price of crude oil has increased rapidly. On Monday, the price of crude had reached $ 139 a barrel for some time.
For the first time since 2008, the price of crude has reached this level. The US and its allies have not yet banned Russian oil. The question is, what will happen if Russian oil is banned?
Experts say that the ban on Russian oil will have serious consequences. This is because Russia has a major share in the global supply of petroleum. It exports around 7 million barrels of crude daily. This accounts for about 7 percent of the total global supply. Therefore, if the ban is imposed, the already boiling crude will catch fire. Its prices can go up a lot.
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JP Morgan has said that if the ban is imposed, the price of crude can go up to $185 a barrel by the end of this year. Already some countries have stopped importing oil from Russia, its prices have increased significantly. However, several economists polled by Reuters expect crude to remain below $100 a barrel.
Earlier, the price of crude had gone above $100 per barrel in 2014. However, crude had set the height record in July 2008. Then the price of crude had reached $ 147 per barrel. Two years ago, the price of crude had fallen to the ground. There was a sharp drop in crude after the Corona epidemic started. The price of West Texas crude had reached below zero. The reason for this is that sellers were ready to pay the price to the buyer of crude to reduce its stock.
The biggest impact of expensive crude will be on the prices of commodities. It is believed that for every 10 per cent increase in oil price, inflation in the euro zone increases by 0.1 to 0.2 per cent. For every $10 per barrel increase in the price of crude in the US, inflation increases by 0.2 percent. Apart from being a major supplier of crude crude, Russia is also a major exporter of cereals and fertilizers. Therefore, banning Russia will also have an impact on global food security.
Right now the economies of countries around the world are on the path of recovery. Trying to recover from the injury of the corona pandemic. In such a situation, the reduction in international trade will have a direct effect on the economies of the countries. This will reduce growth.