Crude oil prices are expected to remain volatile in 2024 owing to geopolitical tensions and disruptions in the Red Sea, the topmost official of Bharat Petroleum Corporation Limited (BPCL) said on January 30.
Chairman and Managing Director G Krishnakumar, while speaking during the post-results conference call, said that weak demand in major economies and geopolitical issues ranging from ongoing war between Russia- Ukraine and crisis in the Middle-East would lead to volatility in crude prices.
Currently, crude oil prices are trading around $80 per barrel amid healthy inventory in the US and weak demand, majorly from China.
“In the last three months, crude oil prices have remained below $90 per barrel despite supply cuts by major oil suppliers. This resilience was due to lacklustre growth in major world economies influencing downward revisions in global oil demand projections,” said Krishnakumar.
“However, the ongoing Russian-Ukraine war, conflict in the Middle-East, tensions in the Red Sea point to the negative impacts in the global supply chain. These continued uncertainties are anticipated to contribute to the volatility of crude oil prices throughout the year,” he added.
In the third quarter of financial year 2023-24, the state-run oil marketing company reported consolidated net profit of Rs 3,181.42 crore, against a profit of Rs 1,747.01 crore a year ago, helped by improved refining margins amid softer crude oil prices.
In Q3, Krishnakumar said Russian crude oil contributed for around 40 percent of the total oil imported by BPCL, compared to 40-45 percent in the previous quarter. Russian oil has found a major share in India’s crude imports as Moscow has been providing oil at discounted prices. However, the discounts have narrowed down in the recent months.
BPCL management also said that disruption in the Red Sea has not impacted the company in any way as of now. However, BPCL would be on the lookout for future course of action regarding the Red Sea issue, the officials added.
Amid tensions in the Middle-East, Red Sea—which accounts for 10 percent of the world's oil, grain, and consumer goods shipments—has also been impacted. According to several reports, freight costs have significantly gone up for shipments going through the Red Sea.
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