Oil prices rose in the first session of the new year, boosted by potential disruption to West Asian supply after the latest attack on a container ship in the Red Sea, and by Chinese demand hopes.
Brent crude was up 49 cents, or 0.6 per cent, to $77.53 a barrel at 1432 GMT. US West Texas Intermediate crude was up 36 cents, or 0.5 per cent, at $72.01, after both benchmarks gained around $2 in earlier trading.
A Reuters survey of economists and analysts predicted that Brent crude would average $82.56 a barrel this year, up slightly from the 2023 average of $82.17, with weak global growth expected to cap demand. Geopolitical tensions, however, could provide price support.
US helicopters on Sunday repelled an attack by Iran-backed Houthi forces on a Maersk container vessel in the Red Sea, sinking three Houthi vessels and killing 10 of the militants, fuelling risks of the Israel-Hamas war becoming a wider conflict.
Windfall tax
The government has hiked the windfall tax on crude oil produced in the country and cut the levy to nil on exports of diesel and ATF.
The tax, levied in the form of Special Additional Excise Duty (SAED), on domestically produced crude oil has been raised to Rs 2,300 from Rs 1,300 per tonne, according to an official notification.
The SAED on the export of diesel has been reduced to nil from Rs 0.50 a litre.
The levy on export of jet fuel or ATF has been cut to nil from Rs 1 per litre.
The SAED on petrol will continue to be zero. The new rates are effective Tuesday.
India first imposed windfall profit taxes on July 1 2022, joining a growing number of nations that tax supernormal profits of energy companies.
A windfall tax is imposed on crude when global benchmarks surpass $75 per barrel.
The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks.
Reuters and New Delhi Bureau
