US President Donald Trumps' Iran sanctions will apply from November 5 and in its wake it is highly likely that crude oil which has receded to lower levels will again trade higher at levels of $85 per barrel. This will again make auto fuel dearer in Indian cities, which for quiet some time has given some sigh of relief of Indian consumers.
The economic sanctions on Iran have been re-imposed by withdrawing away the nuclear accord of 2015.
Early this week, prices of brent crude touched levels of $77 per barrel but again due to kick back in equities is trending higher in price. And now as the Iran sanction is to come in from November 5, brent crude will again climb up in price to $85 per barrel.
The higher price will be on the hopes of losing a major oil producer as per the Care Ratings report. Also, the report pointed that prices can remain on the higher end due to the winter months, supply side constraints in Venezuela and Libya and impending resolution between the US and Saudi Arabia.
But, given the bullish outlook for crude after the Iran oil export sanctions become effective, auto fuel will again jump higher in price, which for 9 consecutive days has seen a fall in some of the major Indian cities.
So, despite the current situation of higher petrol and diesel prices out country is reeling under, we may expect the trend to continue even further.