Indian Petroleum Minister Dharmendra Pradhan on Monday raised the issue of premium being charged on oil supplied to Asian countries by some OPEC members and asked that a reasonable pricing policy be adopted by the 13-nation producers’ cartel. “Raised issue of Asian Premium still being charged from us by few OPEC countries; asked for ‘Responsible Price’ & ‘seller-buyer alignment’,” Pradhan said in a tweet following his meeting here with Organisation of the Petroleum Exporting Countries (OPEC) Secretary General (SG) Mohammad Sanusi Barkindo.
“Had delegation level talks with SG & his technical team; Indian side had all 7 Refiners including IOCL, HPCL, BPCL, MRPL, Reliance, Essar, HMEL,” Pradhan said in another tweet. He will be representing India at the head of a delegation comprising major Indian refiners at a meeting scheduled by the OPEC here on Thursday. The agenda of the meeting, to be attended by both OPEC and non-OPEC producers, is to extend output cuts in view of the recent rise in US shale inventories. “SG, OPEC briefed about their efforts for price stabilisation of crude oil, including their cooperation with non-OPEC countries for this,” the Indian minister said in a separate tweet “Had exchange of views with Secretary General of OPEC as part of India-OPEC Institutional Dialogue in Vienna,” he added.
Prior to Pradhan’s departure for here on Sunday, Petroleum Ministry officials in New Delhi said India’s strategy at the OPEC meeting would be to leverage its massive market size for better terms like discounts and longer credit period. The demand for crude oil in India is expected to grow by over 3 per cent in 2017 at around 4.5 million barrels per day (mbd). Last November, major oil producers agreed to cut output as a response to the global supply glut that had been pushing down prices for nearly two years. OPEC’s largest producer, Saudi Arabia said on Sunday that most members are agreeable on extending the output cut in the face of the global supply glut.
“Everybody I talked to expressed support and enthusiasm to join in this direction (output cuts), but of course it doesn’t pre-empt any creative suggestions that may come about,” Saudi Arabian Energy Minister Khalid al-Falih told reporters in Riyadh. He said extending the supply cuts by a further nine months until next March, and adding one or two small producers to the pact, should reduce oil inventories to their five-year average “We believe that continuation with the same level of cuts, plus eventually adding one or two small producers, if they wish to join, will be more than adequate to bring the five-year balance to where they need to be by the end of the first quarter 2018,” Al-Falih said.
Last week, Saudi Arabia and Russia agreed on the need to prolong the current agreement on cuts, which expires in June, until March 2018. In early December, oil producers outside OPEC, led by Russia, agreed to reduce output by 558,000 barrels per day (bpd). This came in the wake of the OPEC’s November 30 decision to cut output by 1.2 million bpd for six months effective from January 1. This is the first time since 2001 that OPEC and some of its rivals had reached a deal to jointly reduce output to tackle the global oil glut. Oil prices had earlier fallen by more than 50 per cent in less than two years, from levels of over $120 a barrel.
As per available data, the Indian basket, comprising 73 per cent sour-grade Dubai and Oman crudes, and the balance in sweet-grade Brent, closed trade on Friday at $52.30 for a barrel of 159 litres, which was higher than the previous day’s close at $51.28. DeMarcus Ware Womens JerseyShare This