The US oil crash was a result of various factors and at the top of the list was the change in consumption pattern due to the pandemic. Oil producers were forced to pay buyers to take the glut of crude oil, which was tough for them to store, as rising stockpiles of crude oil loomed in oil storage facilities. On the US stock market front, investors bailed out of the May contract ahead of expiry on Monday because of a lack of demand for the actual oil. The fall in US crude oil could also be attributed to the recent output cut agreement between the Organization of Petroleum Exporting Countries (OPEC) and its allies. Reports by PTI say that an agreement between top producers to cut output by 10 million barrels a day was also having very little impact as people continued to stay home due to the pandemic and restrictions on travel have not been lifted.
But while the sudden crash was surprising, crude oil prices have been low for a while now. According to a report by the Economic Times rupee depreciation and an increase in taxes by the Central government in March means that consumers may not gain much from global low crude oil prices. The report also said that fuel retailers are making a margin of Rs 13 per litre but since the demand is low due to the lockdown it may not turn into a profit. According to other reports state-controlled oil marketing companies have also not changed the prices of petrol and diesel in the country and it has remained unchanged for over 35 days.
India also planned to take advantage of the low prices and in March had decided to fill its Strategic Petroleum Reserve by buying from Saudi Arabia and the United Arab Emirates(UAE). And on April 14, a report by Reuters says that India planned to fill its reserves by the third week of May.