A day after Prime Minister Narendra Modi voiced concerns about high crude prices, oil cartel OPEC on Tuesday said it has not failed India and other major consuming countries as it restored stability in the market after four years of downturn.
Organisation of Petroleum Exporting Countries (OPEC) Secretary General Sanusi Barkindo, however, said the stability achieved in past month is being threatened by headwinds from extraneous factors like frictions between leading trading partners of the world, revisal of monetary stimuli and upward movement in interest rates.
Speaking at the India Energy Forum, he said a year ago Prime Minister Modi, Oil Minister Dharmendra Pradhan and industry chieftains had “all commended the joint effort of OPEC and non-OPEC to rescue the industry from the downturn”.
“India, the third largest consuming country of hydrocarbon, has endorsed this collaborative effort to restore stability to the oil market and had, in addition, asked to do whatever is necessary to sustain this stability going forward,” he said.
Without stability, major consuming countries cannot plan let alone manage demand-supply dynamics.
“We have not failed India, we have not failed major consuming countries. Our actions, decision all take into account the interest of consuming country,” he said. “We have a vested interest in India continue to grow, prosper, continue to use oil in its energy mix.”
On Monday, Modi had voice concerns about high oil prices killing global growth at a meeting where Saudi and UAE oil ministers as also industry captains were present.
India has been over the past two months battered by high crude oil prices that have sent retail petrol, diesel and LPG rates to record high, posed inflationary risks and together with a sliding rupee threatened to upset its current account deficit. Also, unrelenting fuel price rise since mid-August has negated cut in taxes and subsidy. Barkindo said the stability achieved over the past months is under threat from a combination of factors that are beyond the control of oil producers.
“In the short term we are also beginning to see a rise in volatility,” he said. “Yes at the moment the market is well supplied. However, these extraneous factors are beginning to make this balance look fragile. These factors are completely outside the control of OPEC and non-OPEC (oil producers).”
He said on Monday Saudi Arabia, the world’s biggest exporter of oil in the world, assured all consumers “to remain claim, not to panic and that there is ample supplies to meet”.
“Yes, the market is well supplied, a balance has been achieved. But this balance is looking fragile largely because of actors outside our control,” he said.
Barkindo said the recently released OPEC’s World Oil Outlook, primary energy demand, globally, is expected to increase by 33 per cent, or 91 million barrels of oil equivalent per day (mboe/d), between 2015 and 2040.
“A massive 24 per cent of this anticipated increase will be from India, or 22 mboe/d,” he said. “World oil demand is expected to increase by 14.5 million barels per day (mb/d), increasing from 97.2 mb/d in 2017 to 111.7 mb/d in 2040. India will account for oil demand growth of 5.8 mb/d, which represents an astonishing 40 per cent of the overall increase.”