Brent crude oil
Why in News?
Brent crude oil crossed the psychologically pivotal $100-per-barrel mark due to severe geopolitical escalations in West Asia, before retreating to around $97 per barrel.
About Brent Crude Oil
- Global Pricing Benchmark: Brent crude serves as the leading international benchmark, setting or guiding the price for roughly 78% of the world's physically traded crude oil.
- Chemical Profile: It is classified as a "light" oil (low density with an API gravity around 38°) and a "sweet" oil (low sulfur content under 0.5%), making it cheap and easy to refine into petrol, diesel, and jet fuel.
- Geographic Origin: It is a waterborne blend of petroleums extracted from major oilfields in the North Sea, located between the United Kingdom and Norway.
- Logistical Advantage: Unlike landlocked, regionally trapped alternatives, its seaborne nature gives it direct access to global shipping lanes, port capacities, and global refinery markets.
- Brent vs. WTI: While Brent tracks international seaborne markets, West Texas Intermediate (WTI) is sourced from landlocked U.S. fields and serves primarily as the North American benchmark.
Impact on Global and Indian Markets
- Indian Fuel Pressure: Skyrocketing Brent costs immediately squeeze Indian refining margins, causing retail petrol to hover around ₹102.12/litre and diesel at ₹95.20/litre in Delhi.
- Balance of Payments: Sustained $100+ oil directly widens India's trade deficit and severely worsens domestic Balance of Payments (BoP) concerns.
- Freight and Rerouting: Avoiding the Red Sea forces tankers to circumnavigate Africa via the Cape of Good Hope, adding immense transit time and steep maritime freight costs.
- Stock Market Tumbles: Volatility in the energy corridor triggered institutional equity sell-offs, dragging the Indian Nifty down to the 23,800 zone and causing major corrections in global indices.
