NEW DELHI: The US Presidential elections could make things costlier for India in one way at least: crude oil.
While the summer’s record low prices helped India save over Rs 5,000 crore via cheap oil imports, analysts note that if Joe Biden wins, oil prices may start moving upwards again.
According to a Goldman Sachs research note, a Biden-Democratic party win would be “a positive catalyst” for crude prices.
“Headwinds to US oil and gas production would rise further under a Joe Biden administration, even if the candidate has struck a centrist tone,” the bank’s analysts believe.
Biden has taken a vocal stand against increased shale mining in the US, and Motilal Oswal Financial Services (MOFSL) analysts say that a Biden administration could lead to more regulatory oversight and costs for the shale sector— not just a clamp down on production.
“Biden also says taxpayer costs can be recovered by repealing the generous tax bonanza that Trump granted US fossil fuels. Forecasts suggest that taxes could increase costs by as much as $5 per barrel,” MOFSL analysts noted.
Brent oil, which forms a large part of India’s crude oil basket, currently trades at $43 per barrel, and WTI crude at around $41 per barrel.