CRUDE BONUS?

GLOBAL CRUDE OIL PRICES ARE TRENDING DOWNWARDS, SPARKING CONCERNS OF A GLOBAL RECESSION. FOR INDIA, FALLING OIL PRICES COULD PROVIDE SOME RESPITE, BUT EXPERTS CAUTION THAT IT MAY BE SHORT-LIVED

- BY SURABHI

AS GLOBAL CRUDE oil prices plunge, the question that’s being asked in India and around the world is whether this isa silver lining or a dark cloud? That’s because US President Donald Trump’s tariff announcements have dampened sentiment and heightened fears of an impending global recession.

For India, falling crude oil prices are typically a reason to cheer when it’s business as usual. After all, India is the third-largest importer of crude oil after China and the US and a fall not only lowers its import bill, but also reduces inflation and the fiscal deficit, cuts the subsidy bill, makes exports more competitive and boosts overall economic growth. For consumers, it means that their fuel bills could possibly go down with acut in retail prices.

But since the Indian economy is closely intertwined with global developments, can falling oil prices also becomea liability?

In the four months since Trump took over as the US President, business has been very far from usual. Almost daily announcements and reversals by the US on trade and tariff levies on countries across the globe have dampened sentiment, with equity, bond and currency markets on a roller-coaster ride, reflecting the volatility in the global economy. There are concerns that the tariff hikes could lead to lower demand for goods in the US and trigger an economic slowdown if nota full-fledged recession that would also affect economies across the world.

Global crude oil prices, too, have mirrored this uncertain outlook and have fallen in recent weeks to touch a four-year low after Trump’s “reciprocal” tariff announcement on April 2. Some believe that crude oil prices could fall further in the coming weeks because of the trade war. Brent crude dipped below $65 per barrel on April 4 and the West Texas Intermediate (WTI) has inched down to $61 on April 10 before recovering.