Central government has tools to deal with volatile crude oil rates, says official

Amid tensions in the Middle East causing wild swings in crude oil rates, a central government official has said that India is bound to be impacted by the spillover impact of global developments and has the tools to deal with volatility in crude oil rates. The remarks come on a day when crude oil prices have spiked and are on track to finish the week with a rise of 10 per cent, as investors assess whether a wider conflict in the Middle East will hamper global supplies. Meanwhile, the US is deciding whether to support Israel's strikes on Iran's oil facilities as retaliation for Tehran's missile attack on Israel.

The government is closely watching the developments but is "not unduly worried", said the official. 

"We have seen much higher crude oil prices... Crude oil price still not at those levels," the official added. 

India meets about four-fifths of its demand for oil through imports. 

"Fiscal consolidation is a way to say there is enough for private players to invest... Some of the challenges are unlikely to come down," said the official. 

Meanwhile, US President Joe Biden's comments, that the US was discussing strikes on Iranian oil facilities, sent international oil benchmarks soaring.

The rates were already trading higher over the past few sessions. 

Brent crude and West Texas Intermediate (WTI) crude futures surged about 1.8 per cent each to $79 per barrel and $75.1 per barrel, respectively. A weekly gain of 10 per cent will be the highest such rise in about 2 years.  

Tensions flared across the Middle East after Iran launched a ballistic missile attack on Israel this week.