Petrol, Diesel Prices Raised Again As Oil Hits $70 Amid US-Iran Tensions

Fuel prices in India were raised for the fifth consecutive day on Monday as the fallout between the US and Iran escalated pushed international crude oil prices past $70/barrel.

Petrol prices per litre were raised by 15-16 paise to Rs 75.69 in New Delhi, Rs 78.28 in Kolkata, Rs 81.28 in Mumbai and Rs 78.64 in Chennai.

Diesel price per litre rose by 17-19 paise to Rs 68.68 in New Delhi, Rs 71.04 in Kolkata, Rs 72.02 in Mumbai and Rs 72.58 in Chennai.

In the international market, oil prices first made a sharp surge on Friday after news of the killing of Iran's key political figure General Qassem Soleimani in airstrikes conducted by US forces at the orders of President Donald Trump became known.

On Sunday night trading, international benchmark Brent crude gained 2.3 percent to trade at $70.18 per barrel after an Iranian state-run television broadcast said that the nation would no longer respect uranium enrichment restrictions set forth in 2015′s nuclear deal.

It also said that Tehran would reverse its steps if Washington lifted its sanctions.

Petrol and diesel prices in India are revised daily based on international rates and foreign exchange rates.

Long-prevailing tensions between the two nations over the nuclear deal and sanctions had earlier intensified in September 2019, when the US blamed Iran for strikes in Abqaiq and Khurais in Saudi Arabia, the largest crude-processing plant and oil field in the world. Iran, however, denied involvement.

Analysts now fear the extent of retaliation from Iran, as geopolitical event of this scale has caused a drastic increase in oil prices in the past.

Citi Group told CNBC that other possible retaliations could be "attacks on pipeline oil flows or shipping through either the Strait of Hormuz or the Red Sea," an important shipping-route through which more than a fifth of the world's oil supply flows.

Further, the Iraqi parliament passed a resolution on Sunday calling for the government to expel foreign troops from the country in the wake the airstrikes that occurred near Baghdad International Airport.

To this, Trump responded with threats to slap sanctions on Iraq.

Sanctions on the OPEC's second-largest oil producer, which pumped around 4.6 million barrels per day in December, will only make oil costlier.