There was some relief in crude oil prices on Monday after they rallied to touch a five-month-high at around $109/ barrel on Friday.
Global benchmark Brent crude declined by 1.73% to $107.96 per barrel as of 6:34 a.m. IST, while US crude West Texas Intermediate traded at $100.78 per barrel, down only 0.7%.
The relief comes despite fighting continuing in the Gulf region, after Ukraine resumed its attacks on Russian energy infrastructure as well.
In the Persian Gulf off the coast of Saudi Arabia, more tankers were struck down according to incident reports from the United Kingdom Maritime Trade Operations Centre.
However, over the weekend the United States said that its forces helped move more than 100 million barrel of oil through the Strait of Hormuz over the last week, implying that some supply has been escorted out of the oil rich region.
Brent has climbed more than 75% this year as widening hostilities in the Middle Easyt and the Russia-Ukraine war restricted supply.
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Physical markets have visibly felt the supply pinch with refined products such as petrol and diesel surging even more sharply than crude oil, adding to inflationary pressure and weighing on the global economy.
From Friday onwards, the central government raised windfall tax on exports of petrol, and reduced levies on diesel.
The tax on petrol export was hiked to 2.5 rupees ($0.0263) per litre from 0.5 rupees per litre, according to the notification. On the other hand, duty on diesel exports was slashed to 8.5 rupees per litre from 16 rupees per litre, effective October 16, the order said.
Windfall taxes on fuel exports were first imposed in July 2022 by the government, but they were withdrawn two years later. The duties were reintroduced in March 2026 to grapple with surging energy prices as the US-Israeli war on Iran waged on.
At present, the export taxes are reviewed every fortnight and adjusted in line with movements in international crude oil and petroleum product prices.
$200/Barrel On Cards?
That extreme scenario of oil hitting $200, that faded over the summer, is now back in the conversation. The world's biggest independent oil trader says only a makeshift shipping arrangement is keeping it at bay. Meanwhile, crude stocks in the Middle East and the West are near their limits. For oil to rocket to $200, the rates would need to increase less than 2 times.
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