Will Afghanistan situation have bearing on global oil prices?
Darpan News Desk IANS, 20 Aug, 2021 12:41 PM
New Delhi, Aug 20: Will the political turmoil in strategically-located Afghanistan impact global crude oil prices? No one has the answer yet.
For the uninitiated, it may seem far-fetched that the political brawl in Afghanistan, which neither features as a prominent oil producing country nor a major consumer country, would have a bearing on global crude prices.
But the impact of such utter confusion and uncertainty could easily spill over in the region including Iran and other countries such as the Saudi Arabia and UAE which are major oil producers in the world. Saudi Arabia is the second largest oil producer in the world, exporting about 59 per cent of its crude.
"What happens in Afghanistan in near future will impact oil prices, especially if the Talibans go back to their old ways and allow sanctuaries to Islamic fundamentalists from hydrocarbon-rich Middle East, North Africa and Central Asia," energy expert Narendra Taneja in a tweet said.
"If they changed, they will not be Talibans," he added.
Taneja told India Narrative that if the turmoil is restricted within Afghan boundaries, the impact would be limited. But if Afghanistan continues to be on boil, and boil violently, the oil producing regions of Middle East and Central Asia could get affected and, consequently, oil prices," he said.
Barrons, a Dow Jones & Company publication, said that tensions in the "Middle East have the potential to lift prices." It noted that earlier JP Morgan had predicted that oil prices could touch $80 a barrel with rising demand and constraint supply.
Matt Gertken, head of geopolitical strategy, BCA Research�a provider of global investment strategy, in an interview with Barrons, however said that the OPEC (Organization of the Petroleum Exporting Countries) 2.0 "has regained discipline after last year's market-share wars." "The group won't want prices to rise too high, which would accelerate global green efforts. The most likely outcome is increased volatility in oil prices," Barrons quoted him as saying.
Brent crude price on Tuesday touched $66.74 a barrel. Global oil prices have been rising throughout 2021 driven by hopes of economic recovery. The major oil producing countries had also cut supplies.
Increase in global crude prices has a direct bearing on India's economy. This could be even harsher at this point, especially as the country, which imports over 80 per cent of its total crude requirements, is still grappling with the after-effects of the Covid 19 pandemic.
Domestic prices of petrol and diesel are already at an all time high.
Meanwhile, India has already started to diversify its oil importing markets to reduce dependence on particular exporting countries. Countries like the US, Nigeria have come up as important suppliers of crude for India.
While Biden has previously blamed Afghans for the U.S. failure to get out more allies ahead of this month's sudden Taliban takeover, U.S. officials told The Associated Press that American diplomats had formally urged weeks ago that the administration ramp up evacuation efforts.
In a statement on Friday, the U.N. health agency said the new scientific group would provide the WHO with an independent analysis of the work done to date to pinpoint the origins of COVID-19 and to advise the agency on necessary next steps. The experts will also provide guidance on critical issues regarding the potential emergence of other viruses capable of triggering outbreaks, such as MERS and Ebola.
During their first press conference on Tuesday the Taliban pressed the right button-backing women's rights. But their promise of protecting women's rights had an important nuance: Women will enjoy freedoms but within the ambit of "Islamic law" .
A contingent of persons from the Hindu and Sikh communities who are stranded in Afghanistan were provided reassurance of safety by the Taliban, media reports said. Over 300 Hindus and Sikhs are reportedly taking shelter at the Karte Parwan Gurudwara in Kabul.
We need humanitarian supplies. The refugee situation we updated you with last week and the week before has only deteriorated. We have 300,000 internal refugees and 80,000 children who are without shelter and food. Where we were short of supplies, now we are out.
Nikita Ishchenko, a spokesman for the Russian Embassy in Kabul, was quoted as saying by RIA: "Four cars were full of money, they tried to stuff another part of the money into a helicopter, but not all of it fit. And some of the money was left lying on the tarmac."
