Page 9 - AsianOil Week 13 2021

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India continues to rail

against oil supply cuts

POLICY THE Indian government maintained its pres-
sure on OPEC+ and Saudi Arabia this past week,
pushing for an easing in production cuts in order
to lower international oil prices.
Indian Minister of Petroleum and Natural
Gas Dharmendra Pradhan said on March 26 that
his country’s energy purchases were driven by
commercial interests and not bilateral relations.
“India will keep its interest in mind in decid-
ing on its strategic and economic decisions,” he
told an industry event. “We are a consuming
nation and we will have to import energy for a
long time. So, whosoever gives up cheap, and that India will diversify its imports as well as
easy, [oil] we will buy from them.” speed up its adoption of alternative energy sup-
He said it did not matter whether the oil came plies if production cuts are not eased.
from Iraq, the US, United Arab Emirates (UAE) Saudi Energy Minister Prince Abdulaziz bin
or Saudi Arabia, India’s “common interest” was Salman has suggested New Delhi could open
paramount. the country’s strategic petroleum reserve (SPR),
India imported 2.11mn tonnes (552,000 which was filled with cheap oil in the aftermath
barrels per day (bpd)) of US crude in February, of last year’s oil price collapse, if it is concerned
dethroning Saudi Arabia as the Asian giant’s sec- by the current pricing environment.
ond largest supplier in the process – reportedly Pradhan, however, has not been not
marking the first time the Middle Eastern sup- impressed by the advice, describing it as “undip-
plier has dropped below the top two spots since lomatic”. He added: “I politely disagree with that
2006. kind of approach. Certainly, India has its own
Iraq supplied 867,500 bpd in February, while strategy, when and how to use our own storage,
Saudi shipments fell by 42% month on month and we are conscious about our interests.”
to 445,200 bpd, leaving the kingdom in fourth Oil prices had a turbulent month in March.
place. The Brent benchmark reached a 14-month high
Pradhan said: “It’s not the issue of we are of more than $71 per barrel on March 8, then
going to be closer to whom. The issue is who is tumbled to $60 on March 24 owing to extended
going to serve our interests. Today Iraq is the lockdowns in Europe, before bouncing back to
number one supplier of our requirement. We $64 on the blocking the Suez Canal by the Ever
are taking [a] substantial amount from UAE also. Given tanker.
UAE is a very reliable partner for India in crude While Indian officials have told local media
oil supply. We have some offtake conditions from outlets that the blocked route does not pose a
Kuwait also, from certain African countries also. threat to country’s oil supply, they have acknowl-
We are open, we are a free market.” edged that the longer the problem lasts the more
Pradhan has been an outspoken critic of upward pressure it will place on tanker rates and
OPEC+ this year, complaining that the organi- thus crude prices.
sation has failed to deliver much-needed oil price Barclays has predicted that Brent prices will
stability at a time when the global economy is average $71 per barrel in 2022, while JPMorgan
trying to find its feet. He has repeatedly warned has predicted that they could average $74.™

India keeps lid on gas prices

POLICY THE Indian government has kept the price of rates for the six months from April 1 would
state-run developers’ conventional natural gas remain unchanged from the $1.79 per mmBtu
production level while lowering rates for pro- ($49.51 per 1,000 cubic metres) set during the
duction from challenging deposits. previous six-month period.
The Ministry for Petroleum and Natural Gas’s The rate, the lowest level in a decade, applies
Petroleum Planning and Analysis Cell (PPAC) to blocks that were directly awarded to state-run
announced on March 31 that conventional gas developers Oil and Natural Gas Corp. (ONGC)

Week 13 01•April•2021 www. NEWSBASE .com P9