India will bat for a lower price of crude oil at the coming edition to CERAWeek, a premier energy conference that is to be held in Delhi later this week.
“Crude oil prices have already crossed the tipping point of around $70 a barrel,” said a senior oil ministry official aware of the stand India is expected to take. This year’s CERAWeek is taking place at a time when global oil prices are hitting historical high. India will be anchoring this international meeting that will be attended by representatives from the world’s largest oil producer, Saudi Arabia and the Organization of the Petroleum Exporting Countries (Opec). Oil prices had hit a fresh three-year high on Friday, climbing above $85 a barrel on forecasts of a supply deficit over the next few months as rocketing gas and coal prices stoke a switch to oil products.
There will be ministerial addresses by Sultan Al Jabar, the Group Chief Executive Officer of the Abu Dhabi National Oil Company (Adnoc), Abdulaziz bin Salman Al-Saud, Minister of Energy, Saudi Arabia, and Saad Sherida Al-Kaabi, President and Chief Executive Officer of Qatar Petroleum, during the event.
“The global crude oil price was on top of the agenda for the coming CERAWeek…India has held multiple rounds of talks with oil producing nations and apprised them of our position,” the oil ministry official said.
According to CERAWeek’s agenda document, there is a session on will high prices hasten the transition away from oil. OPEC’s Secretary General, Mohammad Sanusi Barkindo is expected to address this session. Prime Minister Narendra Modi is also expected to meet 30 senior executives from the oil and gas industry at the sidelines of CERAWeek.
“In the past, high oil prices have increased the cost competitiveness of low-carbon energy alternatives and made such investments more attractive. Oil and gas prices are now reaching multi-year highs, creating additional momentum by policy makers and environmentalists to further accelerate the pace of transition,” the agenda document said.
Another session at CERAWeek is about balancing the interests of oil and gas consuming and producing nations.
“Historically, demand pressures were the prime catalyst of long-lasting cycles of deficit and rising prices. But this situation is changing as supply-side dynamics become the prime catalyst, which could shorten both cycles of surplus and deficit,” the agenda document said.
Global crude oil prices have been on an upward trajectory and have crossed $85 a barrel, much above the comfortable range for India. These prices have risen from lows of around $19 a barrel in March 2020, resulting in more expensive transport and cooking for most Indians.
This makes it harder for oil importing countries like India. According to Commerce Ministry data, India’s oil imports in September 2021 stood at $17.44 billion (Rs 1.28 trillion), which was almost 200 per cent higher compared to $5.83 billion (Rs 42,812.53 crore) in September 2020.
Oil imports from April to September 2021 were at $72.99 billion (Rs 5.4 trillion) which was 127.99 per cent higher compared to $32.01 billion (Rs 2.4 trillion), over the same period last year.
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