Union Minister Piyush Goyal with Mathias Kormann, Secretary General of the Organization for Economic Co-operation and Development (OECD) in Paris on April 11, 2023. Twitter/@PiyushGoyal
The International Energy Agency (IEA) on April 11, 2023 termed OPEC+’s decision to cut oil production as “risky for the global economy”, saying it could exacerbate already high prices, leading to countries like India High import bills may result for countries.
Fatih Birol, head of the Paris-based energy watchdog, said global oil markets were already set to consolidate in the second half of 2023, with a substantial supply deficit expected.
Speaking to reporters after a bilateral meeting with India’s Commerce and Industry Minister Piyush Goyal in Paris, he said, “Cutting additional production would mean that we have every reason to believe that there could be upward pressure on prices. “
“At this time when the global economy is still very fragile and many emerging countries are facing difficulties with economic performance, I find this decision risky for the global economy,” he said.
Asked if oil prices could cross $100 a barrel again, he said, “I think we’re all day but $85 right now, and looking at the second half of this year, my There are reasons to believe that it may go even higher at the present time.” level:”
Higher oil prices will not only translate into inflationary pressures on other commodities but also create a huge import bill for countries like India, which depend on foreign supplies to meet their requirements.
Birol said, “India is an energy critical country, oil critical country, most of the oil consumed in India is critical, such a move may increase India’s oil import bill and increase its burden on the Indian economy and Indian consumers.” could.”
Shri Goyal is here to meet his counterpart and the French CEO to promote trade and investment between the two countries.
India is the third largest oil importer and consumer in the world. It meets 85 per cent of its oil requirement through imports.
It spent $118 billion on oil imports in the first 11 months of fiscal 2022-23.
Birol said that India’s economy is strong and will remain strong.
“We expect the Indian economy to be the world’s third largest soon and need a growing economy… We revise our numbers all the time but I expect the Indian economy to be stronger this year too, the strongest economies in the world. And as such, we need strong oil and electricity demand,” he said.
On Russia’s invasion of Ukraine, he said the war has spurred a big push for clean energy solutions.
“Besides, we also see that as a result of this war, Russia was a major natural gas exporter in the world. More and more countries are producing and exporting gas and we expect that in the next two to three years. .. LNG will flow into the markets and thus reduce pressure on prices and reduce gas supply security concerns.” Asked about the impact of the sanctions on Russia, he said the objective of reducing Russian oil revenues would be achieved. Has been taken.
“Our numbers show that in one year since February 24, when the war began, Russian oil and gas export revenue declined by 60%. If we consider that oil and gas export revenue is a very important input, it poses a major challenge to the Russian economy. Russian oil is being sold at a discount to international standards as some Western countries have stopped buying it and their insurance companies no longer cover ships carrying such oil. Not providing cover for
India is one of the countries which used the opportunity to buy discount oil to reduce its import bill.
The IEA chief said that India is doing this in a transparent manner and under international norms. “And India is making profit by importing crude at less subsidized price than others. It is definitely a valid step.”