Russia-Ukraine war puts crude oil on boil; know who benefits, loses?

Crude oil may have come to a boil from the Russia-Ukraine war, the price has increased and its direct impact has been on petrol, diesel, natural gas, said Varun Dubey, Senior Research Analyst at Zee Business. He said it also has a big impact on the country's economy.

He said so while speaking with Zee Business Managing Editor and Market Guru Anil Singhvi where he explained Who benefits from the increase in the price of Crude Oil? Who is hurt by the rise in the price of crude oil? and What is the effect of increasing the price by $1?.

Talking about the favorable effects of rising crude oil prices, Dubey says that upstream companies, which produce crude oil, profit greatly. The main beneficiaries are the Oil and Natural Gas Corporation (ONGC) and Oil India Limited. 

According to a calculation, an increase in the price of crude oil by a USD results in a 3-4 percent growth in the EPS of these companies. If we look at the numbers, it is estimated that even if crude oil or gas is only $1 a barrel, these firms will profit roughly Rs 4000 crores per year from the pricing. When the price of crude oil rises, the price of natural gas rises as well, and ONGC earns the advantage.

When the price of crude oil rises, the price of LNG rises in the international market as well. Oil India makes a profit of 500 crores annually if the price of crude oil rises even by 1 dollar. Apart from that, because Gail and Petronet LNG are the country's largest LNG importers, this helps them as well.

While discussing the negative impact of rising crude oil prices, Dubey stated that ups and downs in crude oil prices have an impact on the cost of petrol and diesel, which has a direct impact on automobile firms. Apart from that, (Odisha Mining Corporation) OMC, Ceramic Companies, Power Companies, Paint Companies, and Plastic Companies are also affected.

However, it also has a significant economic impact. The rupee has been weakening by roughly 0.5 % today. Since even if crude oil rises by one dollar, it has a 0.3% impact on the rupee. Because India imports more than 80% of crude oil and crude oil's entire contribution to the import bill is roughly 20% -25%. It has a 0.05 % impact on GDP and 0.05 % -0.06 % impact on CPI too.

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क्रूड में उबाल: पॉजिटिव और निगेटिव?#CrudeOil के भाव बढ़ने से किसे फायदा?
कच्चे तेल के दाम बढ़ने से किसे नुकसान?
$1 दाम बढ़ने का कितना असर?

रूस- यूक्रेन युद्ध के असर से क्रूड में उबाल, क्या हैं पॉजिटिव और निगेटिव असर,जानिए वरुण से..@VarunDubey85 | #Commodities pic.twitter.com/p3PVzReDlT

— Zee Business (@ZeeBusiness) February 28, 2022