Global Oil Prices Surge Amidst World Turmoil, Fueling Diplomacy Among Major Powers

On Thursday, crude oil prices experienced another uptick, reflecting the ongoing global economic uncertainties fueled by conflicts. Despite lingering tensions in the Middle East, concerns over shipping disruptions through the Red Sea have somewhat alleviated, providing support to oil prices.

In the Comex division of London-based IC Exchange, Brent crude, the international oil benchmark, rose 0.1% to $79.75 per barrel, while WTI prices in the New York Mercantile Exchange's Comex division saw a slight dip to $74.06 per barrel.

The ongoing conflicts involving Russia-Ukraine and Israel-Hamas have heightened oil diplomacy among four major economies: the United States, China, Russia, and India. Russia, facing sanctions from Western countries, has redirected its fuel exports to China and India, significantly reducing its market share in Europe.

China has emerged as a key player, with 45-50% of its oil imports now coming from Russia, surpassing Saudi Arabia as its main oil supplier. India, previously not a significant buyer, has become a major partner, sourcing nearly 40% of its total oil supply from Russia.

To counter Western sanctions, Russia has expanded its oil exports to other regions, with India reportedly refining Russian crude and selling it to European customers through a backdoor route, weakening the impact of sanctions. Moscow aims to explore new markets for natural gas and oil exports, expecting significant revenue despite sanctions.

Amid concerns of disruptions in oil supply due to conflicts, major shipping companies, including Maersk, have resumed operations through the Red Sea. However, ongoing tensions in the Middle East, coupled with Iran's involvement, contribute to the complexities of the oil supply landscape.

Against this backdrop, Russian President Vladimir Putin expressed strengthening ties with India during a meeting with Indian Foreign Minister S. Jaishankar. As the world navigates through uncertainties, global oil dynamics continue to be influenced by geopolitical events, emphasizing the interconnectedness of economic and diplomatic factors.