Page 4 - AsianOil Week 50 2021

AsianOil SOUTH ASIA AsianOil

India turns to Russia as

oil prices remain high

POLICY AMID claims by India that oil producers in 175mn barrels, and the US around 727mn
the Middle East are continuing to manipulate barrels.
supply to maintain high prices of crude, the At present, though, the co-ordinated release
government of Narendra Modi in New Delhi by the five leading oil consumers, four in South
last month agreed to play a part in a synchro- or East Asia, has stalled, with no obvious signs
nised release of reserves by the world’s leading of any of the governments involved taking any
importers. further initiative of note.
Alongside strategic reserve release com- On the back of this seeming stagnation in
mitments by the governments of China, Japan, production rates and prices, India also last week
South Korea and the US in November, Indian went ahead with a much-anticipated deal with
Minister of State for Petroleum and Natural Russia, in which the Moscow-based energy
Gas Rameswar Teli agreed to release 5mn bar- company Rosneft will ship around 2mn tonnes,
rels from the country’s own Strategic Petroleum nearly 14.7mn barrels of crude to the sub-conti-
Reserves to help prevent further shortages across nent prior to the end of 2022.
the nation and prevent prices from rising further Unspecified energy agreements signed at
for the ordinary Indian on the street. the same time may later reveal other transfers of
“This step is being taken in a bid to control liquid hydrocarbons should global supply issues
inflationary pressures and (to) provide relief continue into the new year.
to citizens,” the minister said, adding: “India Following the signing of the agreements, a Rosneft will ship
strongly believes that the pricing of hydrocar- statement released by Rosneft CEO Igor Sechin
bons should be reasonable and be determined said: “The signing of a new oil supply contract around 2mn
by market forces”, before making direct reference confirms the strategic nature of the long-term
to the idea of supply manipulation by going on partnership between Rosneft and Indian Oil.” tonnes, nearly
to say “India has repeatedly expressed concern Further Kremlin statements released to mark
at the supply of oil being artificially adjusted the agreements went on to say: “India high- 14.7mn barrels of
below demand levels by oil-producing countries, lighted the need for responsible and informed crude to the sub-
leading to rising prices and negative attendant market pricing of global energy supplies. Both
consequences.” sides noted the importance of dialogue between continent prior to
In response, OPEC has rejected calls to consumers and producers to stabilise energy
increase crude production rates, although 4mn prices. The parties also agreed to consider pros- the end of 2022.
barrels per day (bpd) have now been added to pects for expanding co-operation on hydro and
the markets on a monthly basis. The lack of thermal energy, energy efficiency, and the use of
increase in production, however, saw India in renewable energy sources.”
turn reduce shipments of crude from Saudi Ara- Moscow and New Delhi already work closely
bia by around 25%. on energy issues, with multiple Indian firms
As the world’s third-largest importer of oil, owning sizeable stakes in Russian upstream
India currently holds stocks of around 5.33mn projects in the far north and far east of the coun-
tonnes, an estimated 38mn barrels in huge try, and in the wake of the crude shipment being
underground storage facilities, but still remains announced, Rosneft also signing MoUs with two
85% dependent on oil imports. of India’s leading state refineries – Indian Oil
By comparison, Japan holds an estimated Corp, and ONGC Videsh Ltd (OVL).™

P4 www. NEWSBASE .com Week 50 17•December•2021