India hopeful oil prices stablising as more oil imports likely from western countries
New Delhi: Oil minister Hardeep Singh Puri on Thursday said that India is hopeful for more oil production coming from the western countries like the US and Canada which may calm the markets and bring stability in prices. The minister’s statement comes at a time when volatile oil prices upset economies, which are reliant on imports for meeting their needs as they not just have to spend extra on buying the fuel, but also import inflation that impacts purchasing powers of their people.
“Countries in the western hemisphere are adding more production which may influence oil producers cartel organisation of the petroleum exporting countries (OPEC) to also raise output to earn more while the era of fossil fuel lasts. Today more production is coming on the global market from the Western Hemisphere. Brazil, Guyana, Canada and the US are adding more production. With more and more oil coming, one expects as a result that the market situation will calm,” he said while speaking at CII’s 12th PSE Summit here.
“There is more oil available. What we need is stability and predictability so that in the period ahead countries can base their decisions on lines, which are predictable. The kind of fluctuations, prices going up and down, creates uncertainty in the market that is not good for healthy economic decision making,” Puri said.
“I think we are on a healthy wicket now. Stability in oil prices depends on both availability and the geopolitical situation calming. If there is trouble in one area, that will result in shippers taking a longer route, thereby increasing the freight and insurance rate. All things being equal, if more oil comes into the market and if the global situation also eases, then we can hope for a more predictable assessment,” he added.
The OPEC nations and allies led by Russia, together known as OPEC+, have since late 2022 made a series of deep output cuts to jack up prices and match demand. The OPEC+ members are currently cutting output by a total of 5.86 million barrels per day (bpd), or about 5.7 per cent of global demand. “The OPEC+ is actively reviewing their decision on production cuts and may decide on the issue in a month or two,” the minister said.
Irrespective of that consuming countries are not likely to face any shortfall as more and more oil is coming on to the market, the minister further said that Brazil is adding 300,000-400,000 bpd of production to their output of 3.3 million bpd. “Besides, the US may add another 1 million bpd while Canada and Guyana would also increase output,” he said.
