India expresses concern over rising oil prices following developments in Strait of Hormuz
India expressed concern over developments in the Strait of Hormuz impacting oil prices and sought OPEC-kingpin Saudi Arabia’s active role in keeping rates at reasonable levels.
Brent oil Thursday jumped about 5%, the most since January, and is now trading near $65 a barrel. This comes after tensions ran high in the region after US President Donald Trump approved and then later called off military strikes against Tehran following shooting down of an American Navy drone over the strait by Iranian forces.
Oil Minister Dharmendra Pradhan discussed the situation with Saudi Oil Minister Khalid Al Falih.
“Expressed concern on the developments in the Strait of Hormuz leading to rising crude oil price. Reiterated the sensitivity of Indian consumers to prevailing oil price volatility. Sought active role of #SaudiArabia within OPEC & OPEC Plus for keeping oil prices at reasonable levels,” Pradhan tweeted.
About a quarter of the world’s LNG and about one-fifth of the world’s oil transits through the Strait of Hormuz, the narrow sea conduit that borders Iran.
“Had a telephonic conversation with HE @Khalid_AlFalih, Min. Of Energy, Industry & Mineral Resources, Saudi Arabia and discussed about further strengthening cooperation in hydrocarbon sector to enhance strategic partnership that exists between India and Saudi Arabia,” Pradhan said.
“Discussed about Saudi interests in energy sector in India to further bolster our bilateral ties. Also reviewed with HE @Khalid_AlFalih the progress of Saudi investments in India’s refining & petrochemical sectors.”
Earlier this week, Pradhan spoke to UAE Minister and Abu Dhabi National Oil Company (ADNOC) Group CEO Sultan Ahmed Al Jaber who assured India of uninterrupted supply of oil and LPG despite disruptions in the Strait of Hormuz.
India is 83% dependent on imports to meet its oil needs and is reliant on nations like the UAE to meet half of its cooking gas (LPG) needs.
“Expressed concern at the supply disruptions in the Strait of Hormuz. Dr. Jaber assured me of oil and LPG supplies to India despite the disruptions,” he had tweeted on Monday.
Prior to that, Pradhan had on June 10 spoken to US Secretary of Energy Rick Perry to discuss the impact of crude oil price volatility on consuming nations.
India has time and again warned oil producers that higher crude prices are hurting global economic growth and they should do more to bring down rates to reasonable levels.
Volatility in oil prices has resulted in a see-saw in retail petrol and diesel prices, with rates rising on some days and falling on other.
The government is looking at private investment to raise domestic oil and gas production, which has stagnated for the last few years while fuel demand has been rising by 5-6% annually.
Prime Minister Narendra Modi in 2015 had set a target of reducing India’s oil dependence by 10% to 67% by 2022 (from 77% in 2014-15). However, import dependence has only increased since then and the government is now looking for ways to raise domestic output.