Amid ris­ing prices, In­dia gives OPEC a sharp mes­sage

The Times of India (New Delhi edition) - - TIMES NATION - San­jay.Dutta@ times­group.com

New Delhi: Amid in­di­ca­tions that In­dia is look­ing at nonOPEC sources of crude such as the United States and China to beat down prices, oil min­is­ter Dhar­men­dra Prad­han on Thurs­day met am­bas­sadors from the car­tel’s mem­ber-coun­tries to de­liver a sharp mes­sage: be “re­spon­si­ble” with oil pric­ing or lose mar­ket share.

Prad­han’s meet­ing with the en­voys of OPEC (Or­gan­i­sa­tion of Petroleum Ex­port­ing Coun­tries) fol­lows In­dia’s talks with China on Mon­day for an oil al­liance, dur­ing which one of the pro­pos­als on the ta­ble en­vis­aged In­dian re­fin­ers buy­ing eq­uity crude di­rectly from Chi­nese com­pa­nies with stake in over­seas projects in­stead of the spot mar­ket.

Mon­day’s talks be­tween San­jiv Singh, head of In­di­anOil, In­dia’s largest re­finer and fuel re­tailer, and top ex­ec­u­tives of Chi­nese oil com­pa­nies also looked at in­vest­ing — ei­ther jointly or sep­a­rately — in ex­pand­ing US oil and gas ex­port in­fra­struc­ture to raise ship­ments to Asia as a coun­ter­bal­ance to OPEC, sources said.

These de­vel­op­ments add to In­dia’s ne­go­ti­at­ing strength as the world’s third­largest oil im­porter. To­gether with China, the two coun­tries ac­counted for 17% of global oil con­sump­tion in 2017. In­ter­na­tional En­ergy Agency sees the two fu­elling half the global de­mand growth in the next five years, with In­dia driv­ing of crude oil of LPG in­cre­men­tal de­mand growth through the next two decades.

US oil and gas is al­ready flow­ing to In­dia. The prospect of direct sup­plies from Chi­nese com­pa­nies adds to In­dia’s op­tions and poses a chal­lenge for OPEC.

The meet­ing with the en­voys and the talks with China, thus, laid the ground for Prad­han to force­fully con­vey In­dia’s mes­sage to OPEC en­ergy min­is­ters at the two-day OPEC In­ter­na­tional Sem­i­nar in Vi­enna next week. The min­is­ters are gath­er­ing on June 20 as they de­bate an exit plan for the 2016 pro­duc­tion cut deal, one of the key fac­tors for push­ing up oil prices.

An­other is­sue raised by Prad­han was the ‘Asian Pre­mium’ — or a higher price — charged by West Asian oil ex­porters for ship­ments to Asian buy­ers, as op­posed to Europe.

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