The world’s third-largest oil importer, India, is worried that Thursday’s OPEC + decision not to suspend oil production in April could jeopardize the consumer-led recovery in oil demand, said Indian Petroleum Minister Dharmendra Pradhan. , Told Reuters on Friday.
“As one of the largest countries in terms of crude consumption, India is concerned that such actions by producing countries could have the potential to undermine consumer-led recovery, and that it harms consumers more, especially in our price-sensitive market,” Pradhan told Reuters. .
On Thursday, the OPEC + group surprised the market by deciding not to lift collective crude oil production from April, leaving only small emissions to Russia and Kazakhstan, as at its meeting in January.
Thus, from April onwards, the alliance will not only keep production largely unchanged – with the exception of Russia which will increase production by 130,000 bpd and Kazakhstan by 20,000 bpd, but Saudi Arabia will also cut its extra 1 million bpd in April, which market further intensified.
OPEC +’s surprise move on Thursday saw oil prices rise 5 percent, with Brent approaching $ 68 and WTI Crude well above $ 64 a barrel.
India, which is about 80 percent dependent on oil consumption, has been uneasy about higher oil prices over the past few weeks, boosting oil import bills and local inflation.
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Earlier this week, India called on the OPEC + group to increase production, saying it did not support ‘artificial price reductions’.
As oil prices rose at their highest level in 13 months, India had already called on OPEC + in January to consider the effects of higher oil prices on consumption in recovering economies.
In last year’s oil price drop, India topped its strategic $ 19 per barrel strategic petroleum reserves, saving nearly US $ 700 million in the process, the Indian Ministry of Petroleum and Natural Gas said in September 2020.
Oil above $ 60 is definitely painful for the import bill and consumers of India, and could undermine the recovery of one of the most important markets in the world.
By Tsvetana Paraskova for Oilprice.com
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