Washingtron: The heat of tension between America and Iran has now reached the oil tank. Oil and fuel reserves are depleting rapidly around the world. Energy experts are now eyeing the possible peace agreement between America and Iran. If the oil supply from the Persian Gulf does not normalise soon, common people may have to shell out money.
Why are the reserves depleting rapidly?
During the conflict between America, Israel and Iran, the world’s big reserves took over the global supply. But now they too are becoming empty. The biggest blow has been suffered by America’s Strategic Petroleum Reserve SPR. It is about to reach its lowest level since 1983. America is extracting oil from SPR daily to meet its demand. Stocks have also decreased rapidly in import-dependent countries like Japan and South Korea. The world consumes about 100 million barrels of oil every day. The stores are not able to keep up with such huge consumption.
What difference did Trump’s peace statement make?
President Donald Trump claimed that America and Iran are close to a peace agreement. The international market got relief from this one statement. The price of crude oil fell below 90 dollars per barrel. But experts are saying this relief is temporary. Unless the movement of oil through the Strait of Hormuz is completely free, there will be panic in the market. 20% of the world’s oil passes through Hormuz. Here the bottleneck means global prices on fire.
What are the Gulf countries doing?
The strange thing is that the oil stock of Gulf countries like Saudi, UAE is increasing. The reason is due to tension in Hormuz they are not able to export at normal level. The goods are lying there, but the ship is not able to leave.
Will there really be a fuel crisis?
At present experts are saying that there is no major crisis. But the reserves of petrol, heating oil and jet fuel are less than normal. This is alarming. If the US-Iran deal is not reached or the sea routes remain blocked, the pressure will increase further. Then petrol and diesel along with flight tickets, home heater, transport – everything will become expensive.
What will be the impact on the common man?
Simple thing – supply is less, demand is same, so price is higher. Oil importing countries like India are affected the most. Rupee will weaken, inflation will increase. Right now the market is breathing down Trump’s statement. But the real test will come when tankers start leaving Hormuz unhindered. Till then there will be fluctuations in oil prices.
