International Energy Agency (IEA) executive director Fatih Birol predicted that India’s oil import bill is likely to increase in the second half of the year following the decision to cut in oil production by Saudi Arabia, Russia and other Organisation of the Petroleum Exporting Countries (OPEC).
“Saudi Arabia, Russia and others- the OPEC plus producers decided to cut the oil production. And when we look at the International Energy Agency’s analysis and the analysis of almost every serious institution looking at the oil markets, the second half of this year markets would be all very tight,” Birol said.
The IEA executive director said India is an energy importer country and the majority of oil consumed in the country is imported. Therefore, the decision to cut oil production by major producers will put the burden directly on Indian economy and its consumers.
Birol said in the coming years there would be a downward pressure on the oil prices and supply security concerns as more countries are now producing and exporting their own natural gas which will lead to a float of liquified natural gas (LNG) in the market.
India has become an important player on the global oil market since the beginning of the Russia-Ukraine war which the European Union shunning Russian products, including oil. India, on the other hand, increased its crude oil imports from Russia at discounted rates and enabled its backdoor entry to European nations in the form of refined oil, such as diesel and jet fuel. The oil import jumped by a whopping 33 times more than a year earlier, according to a report released in January.
To this, the IEA top official said it is a legitimate step and India is following the international rules and regulation in terms of trade and financing rule. “India is doing this in a transparent way, and India is profiting having the importing of crude at a lower discounted price than the others. This is definitely a legitimate step,” he added.
