Global oil prices have been easing for the last few weeks though on Monday they rose marginally. This will provide the much required relief to India’s policymakers. India imports more than 80 per cent of its total oil requirements. Price of global WTI crude — world's most actively traded commodity — is now around $95-per-barrel while that of Brent around $104 amid weakening demand and rising fears of global recession. Lower crude prices would directly cut down India’s import bill at a time when uncertainty in the world economic outlook has only risen.

Most central banks have also started tightening monetary policy. However, supplies have somewhat expanded after Lybia resumed production at its various oil fields, Reuters said.

However, according to Oilprice.com, the prices will not go as far down as drivers across the world would like it to go—or as far as politicians up for re-election would like it to go. Barring “a dramatic event of demand destruction, oil is going to remain expensive for the observable future,” it said, adding that the oil-producing cartel has indicated that it is in no rush to deploy its spare capacity to boost global supply.

Meanwhile, Russia is now India’s second largest oil exporter.

Ravindra Rao, head of commodity research at Kotak Securities, said, “Crude trades lower weighed down by mixed inventory report which noted an unexpected decline in US crude oil stocks but also a sharp rise in gasoline stocks reflecting weaker demand despite ongoing summer driving season."

Also read: Indian economy on the mend but policymakers need to be watchful amid high crude prices