Heavy fall in crude oil as soon as Hormuz opens
The entire world was holding its breath for the last one and a half month. The war that broke out between Iran and Israel from February 28, in which America also participated, broke the back of the global supply chain. The biggest reason for this economic crisis was the closure of the 'Strait of Hormuz'. This is an important route of the sea through which about 20 percent of the world's oil and gas passes. But now the situation has suddenly changed. Iran's Foreign Minister Abbas Araghchi has announced to completely open Hormuz for trade. Donald Trump has also thanked Iran on this decision on 'Truth Social'. This one step has changed the picture of the global market and there has been great news for India on three fronts simultaneously.
1- Crude oil boom
India buys about 85 percent of its crude oil needs from abroad. Oil coming from Saudi Arabia, UAE and Kuwait reaches India through this route of Hormuz. As soon as the news of the complete opening of this sea route came, a huge fall in the prices of crude oil was recorded. international market friday night Crude oil fell 12 percent to $ 83 per barrel. But he came. At the same time, Brent crude is also trading around 87 dollars, slipping by 11 percent. Prices have now reached around the February low. Due to cheap crude oil, India's import bill will reduce significantly. This will reduce the pressure on the government treasury and the country's Current Account Deficit (CAD) will improve, which is very positive for the economy.
2- Stock market will become 'rocket'
With the opening of the Hormuz route, all the supply chain concerns have gone away and this has had a direct impact on the stock market sentiment. This important news came after the Indian stock market closed on Friday, but its impact was immediately visible in 'Gift Nifty'. Gift Nifty has jumped by more than 400 points (about 2 percent). This is a clear indication that when Indian markets open on Monday, investors will get a great start. Especially due to falling crude oil prices, strong buying is expected in the shares of oil marketing companies (HPCL, BPCL, IOC) as well as paint, tire and aviation sectors. Due to reduction in geo-political tension, the attitude of foreign investors (FIIs) will also be positive towards India.
3- Huge rise in gold and silver
Generally, when tension reduces, gold prices fall. But this tension in the Middle East had scared the investors so much that they were avoiding investing even in precious metals. Now with the opening of Hormuz and the averting of the threat of war, investors' confidence has suddenly returned. In this changed environment, there has been a huge rise in the prices of gold and silver in the global market as well as in the Indian market. On MCX, silver has reached Rs 2.61 lakh per kg with a strong rise of 5 percent. At the same time, an increase of 1.50 percent has been recorded in gold, due to which the price of 10 grams of gold has increased to Rs 1.55 lakh.
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