India, the world’s third-largest importer of oil, said the decision by major crude producers to continue cutting production at a time of rising prices threatens a consumption-led recovery in some countries.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC +, agreed on Thursday not to increase supplies in April as they await a greater recovery in demand in light of the Corona virus pandemic. Crude prices increased after the announcement and have been up 33 percent since the start of the year.
Oil prices jumped by more than 2 percent on Friday, reaching their highest levels in nearly 14 months, on the back of this decision.
Indian Minister of Petroleum and Natural Gas Dharmendra Pradhan told Reuters: “As one of the major crude consuming countries, India is concerned that such moves by producing countries have the potential to undermine the consumption-led recovery and harm consumers even more, especially in our market. Highly sensitive to the price. “
India, hard hit by high oil prices, urged producers to ease production cuts and help the global economy recover from the coronavirus pandemic.
“We are saddened by the OPEC + decision. It is not good news for India, China, Japan, Korea and other consuming countries,” Pradhan said.
Rising oil prices are posing financial challenges for India, as retail prices for heavily taxed fuel have recently hit record highs, threatening a demand-driven recovery.
India, the third largest economy in Asia, imports about 84 percent of its oil needs, and relies on Middle Eastern supplies to meet about three-fifths of the demand.
Pradhan added, “We continue to appeal to oil producers to find an alternative. Leaving us (as oil-consuming countries) is not in the interest of either party. High oil prices may benefit a group of producing countries, but if they turn away from consumers, this may lead to the search for alternatives.” “.
In response to India’s repeated requests to increase production, Saudi Energy Minister Prince Abdulaziz bin Salman said on Thursday that India should start using the oil it bought at a low price during the price collapse last year.
But he said, “We will continue to work with each other, sharing with them (India) their view that avoiding volatility (in prices) will help both producers and consumers.”
Source: “Reuters”
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