Crude unlikely to return to pre-war levels soon; India's import bill may rise $70bn annually: Report

New Delhi [India], April 15 (ANI): Crude oil prices have risen sharply due to the ongoing West Asia conflict and are not expected to return to the earlier level of $65 per barrel in the near term, according to a report by brokerage firm Prabhudas Lilladher.

The report noted that the increase in prices is likely to persist, keeping India's import bill elevated for the coming months. "We believe crude prices are unlikely to revert to pre-Gulf war conflict levels of USD65/barrel," the report said.

India buys around 4. 3 million barrels of crude every single day. That adds up to about $180 billion a year. With prices now much higher, Prabhudas Lilladher estimates India's oil import bill could jump by more than $70 billion a year.

"The current spike in crude prices is likely to inflate India's import bill by more than USD70bn/annum," the report said. About 20% of the world's crude oil moves through the Strait of Hormuz.

"Shipping route from Strait of Hormuz is critical for maintaining oil prices within a comfortable range and this remains a big uncertainty as of now," the report noted.

"Further escalation of hostilities and any impact on Bab Al-Mandeb can further squeeze oil supplies and push prices up. "The brokerage noted that the war hasn't just hit tankers and routes. Several global natural gas and oil refineries have been destroyed.

These aren't easy to fix. "Several global natural gas and oil refineries have been destroyed and would take quite a bit of time to come back to stream/normalise operation," the report said. When supply takes a hit and takes time to rebuild, prices stay high.

Even if the tensions between the US and Iran deescalate, freight charges, insurance costs, and tanker availability have all spiked and likely to remain at these levels for long.