India’s new oil minister dials OPEC countries as higher fuel prices pinch


India, the world’s third-biggest oil consumer, has conveyed to OPEC countries its concern over high oil prices that are threatening to have an effect on the nascent economic recovery after the devastating pandemic.

New Oil Minister Hardeep Singh Puri has made phone calls to key OPEC nations to communicate the desire for an affordable price for consumers.

After calling his counterparts in Qatar and the UAE, he called Association of the Petroleum Exporting Countries (OPEC) kingpin Saudi Arabia on Thursday evening.

“Had a warm and friendly discussion with His Royal Highness, Prince Abdul Aziz bin Salman Al Saud, Minister of Energy of Saudi Arabia on strengthening bilateral energy partnership and developments in the global energy markets,” Puri tweeted.

Saudi Arabia, he said, is a central player in the international energy market.

“I conveyed my desire to work with His Royal Highness Prince Abdulaziz to cause greater predictability and calm in the global oil markets, and also to see hydrocarbons turn out to be more affordable,” he said.

Saudi Arabia is the world’s largest exporter of crude oil and India’s second-biggest source after Iraq.

The discussions focused “on strengthening bilateral energy partnership and developments in the global energy markets,” he said.

“Highlighted the a very powerful role of Saudi Arabia in impulsively growing energy needs of India in the coming years, and my strong desire to work with His Royal Highness to further diversify our bilateral strategic energy partnership beyond buyer-seller to see greater two-way investments.”

Concerned over the rising oil prices, India has been reaching out to key oil producers in the Middle East.

Puri on July 14 called UAE Minister of Industry Ahmed Al Jaber, who is the chief executive of Abu Dhabi National Oil Co (ADNOC), seeking the UAE’s give a boost to in lowering prices.

The rebound in international oil prices from lows hit in May on the back of demand recovery has sent petrol and diesel rates to a record high in India.

Petrol has crossed the Rs-100-a-litre mark in multiple and a half dozen states and union territories, while diesel is being sold at over Rs 100 a litre in Rajasthan and Odisha.

India, which imports 85 per cent of its oil needs, has long pressed producers’ cartel OPEC and its allies, called OPEC+, to phase out its production cuts and make allowance oil prices to come to fair levels that give a boost to growth. It wants OPEC+ to stop propping up prices with its output cuts.

In March, Puri’s predecessor Dharmendra Pradhan and Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman had an disagreeable exchange over oil prices.

To Pradhan blaming production cuts by OPEC+ members for the surge in oil prices, Prince Abdulaziz said India will have to take one of the vital crude out of the storage that it had purchased “very cheaply final year”.

Days later, Pradhan termed the remark an “undiplomatic response from a friendly nation”.

Since then, the petroleum ministry has asked refiners to take a look at sources outdoor of the Middle East for buying oil.

Puri, a former diplomat, is widely expected to smoothen flared tensions with oil-producing nations in general and Saudi Arabia in specific.

OPEC, Russia and several other allies in a production accord could not reach an agreement earlier this month on output quotas for August and maybe beyond.

Expectations were that the alliance may agree to bring production by 500,000 to 700,000 barrels per day but the decision was once postponed as the UAE differed on the baseline for such output increase.

India is the world’s third-largest consumer of crude and OPEC nations such as Saudi Arabia have traditionally been its principal oil source. But OPEC and OPEC+ ignoring its call for easing of provide curbs had led India to tap newer sources to diversify its crude oil imports.

Consequently, OPEC’s share in India’s oil imports has dropped to approximately 60 per cent in May from 74 per cent in the preceding month.

The two sides have relatively patched up relations, with Saudi Arabia and the UAE supplying critical medicine, oxygen and equipment to help India battle its second wave of coronavirus infections.

(Only the headline and picture of this outline may have been reworked by the Commerce Standard staff; the remainder of the satisfied is auto-generated from a syndicated feed.)

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