Petrol-Diesel to get cheaper after the end of this war? Saudi Arabia and Dubai will face the heat due to…

According to experts, when US and the European Union imposed a ban on Russian oil, it had a direct impact on crude oil prices and Gulf countries benefited from it.

After taking oath as the President of the United States, Donald Trump has been continuously talking to Russia and Ukraine and pressing them to end the ongoing war. However, if the war ends, it will cripple Ukraine. Hungary’s Prime Minister Viktor Orban, who is one of the closest allies of Trump, gave a shocking statement in February. He stated that America can end the war in Ukraine in less than 6 months. At the same time, a Ukrainian MP said that the shipment of American weapons has been stopped. According to experts, if America stops sending weapons, it will become very difficult for Ukraine to fight the war.

It is expected that President Trump may meet his Russian counterpart Vladimir Putin by the end of this month. Both can talk about ending the ongoing war. Meanwhile, the Gulf countries may be very sad with the end of Russia-Ukraine war as it can directly impact on oil prices.

According to experts, when US and the European Union imposed a ban on Russian oil, it had a direct impact on crude oil prices and Gulf countries benefited from it.

OPEC Plus, an organization of oil producing countries which is led by Saudi Arabia, reduced oil production so that oil prices could rise.

Saudi will be sad with the end of Ukraine war

If the war in Ukraine end, it is expected that the prices of essential goods such as oil, metals, and fertilizers will significantly decrease. Additionally, natural gas prices are likely to drop considerably. Victor Katona, a crude oil analyst at the intelligence firm Kpler, mentioned in a report by Middle East Eye that “the conclusion of the war will stabilize Russia’s situation, making a substantial portion of the commodity market readily available again. Clearly, oil prices will fall sharply.”

After meeting Russian Foreign Minister Sergei Lavrov, US Secretary of State Marco Rubio said that “sanctions were imposed due to conflict and to end any conflict, all parties should get concessions.”

If we talk about the oil industry, after the lifting of sanctions, those countries, which had to stop buying Russian oil, will once again start buying Russian oil and this will affect the oil exports from the Middle East.

How low can oil prices go?

Bank of America analysts said in a recent note that a peace settlement in the Ukraine conflict could lead to a decrease in Brent crude prices by USD5 to USD10 per barrel. On Friday afternoon, oil prices had already shown a decline, with Brent crude trading down 2 percent at USD74.96 per barrel.

Victor Katona said that the end of the war in Ukraine would likely result in lower prices.

He added that after the war, Russia would not increase oil production due to limited excess capacity, but the overall supply chain of crude oil would adjust. Katona projected – by the end of this year, oil prices would be lower than current levels.

This could come as bad news for the Gulf countries, specially Saudi Arabia. As per the International Monetary Fund (IMF), Saudi Arabia needs oil prices around USD96 per barrel to balance its budget.

But this gap will increase after the Russia-Ukraine war.

It is noteworthy that, Saudi Arabia has been trying to increase oil prices for a long time. It is investing the money earned from oil inexpensive projects and has started these projects to change its economy from oil-based in the future.

However, the already low oil prices have forced the Saudi royal family to cut the budget of many megaprojects.

Why does India buy Russian oil in UAE currency?

The conclusion of the Ukraine conflict is expected to significantly affect ship owners involved in oil transportation, who have been imposing high premiums due to the associated war risks. Since the onset of the conflict, vessels have had to navigate longer routes to deliver oil. Additionally, there has been a notable decrease in the number of tankers available, which has adversely impacted oil prices. Furthermore, the United States removed Russia from the global financial messaging service SWIFT, complicating payment processes to Russia. As a result, several countries began using Chinese currency for transactions with Russia, although this currency can only be utilized by Russia to purchase goods from China.