Crude oil prices – Global Trends and Impact on India

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Crude oil prices – Global Trends and Impact on India

Introduction

This paper examines the causes of volatility in global crude oil prices, forecasts for the oil market over the next two decades, and the broader economic implications of fluctuating oil prices on inflation, Gross Domestic Product (GDP), fiscal stability and energy security.

It also evaluates the options available to India in managing the challenges associated with crude oil price fluctuations and reducing vulnerability to external energy market shocks.

Crude oil prices have experienced significant turbulence over the past decade, particularly during the last five years. In 2008, crude oil prices reached an all-time high of approximately USD 147 per barrel before falling sharply as the global financial crisis triggered a decline in economic activity and energy demand.

Following the recession, oil prices gradually recovered and continued to rise until 2012. Between 2011 and 2014, prices largely remained stable at around USD 100 per barrel. However, beginning in late 2014, global oversupply and changing market dynamics caused another substantial decline, resulting in average prices falling to approximately USD 43 per barrel in 2016.

Subsequently, crude oil prices began recovering once again and reached nearly USD 80 per barrel during 2018. These recurring cycles of price increases and decreases demonstrate the highly volatile nature of global oil markets and the need for long-term energy planning and diversification strategies.

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Crude oil prices – Global Trends and Impact on India

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