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India warns rising oil prices may dampen global economic recovery

Published 04-02-2021, 02:14 pm
Updated 04-02-2021, 02:18 pm
© Reuters.
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* India's gasoline prices rose to a record high

* India diversifying imports, cutting reliance on Middle East

* Hopes to expand oil, gas trade with U.S.

By Nidhi Verma

NEW DELHI, Feb 4 (Reuters) - India's oil minister Dharmendra Pradhan warned on Thursday that rising oil prices could hurt global economic recovery in the aftermath of the COVID-19 pandemic that caused most economies to shrink last year.

Global crude oil prices LCOc1 CLc1 rose to their highest in about a year this week as production cuts by the Organization of the Petroleum Exporting Countries and their allies including Russia tilted the market balance towards a deficit. O/R x

That has propelled gasoline prices to record levels in the world's third biggest oil consuming and importing nation.

"Efforts at artificially distorting prices will have a dampening effect on the fragile global economic recovery that is underway," Indian oil minister Dharmendra Pradhan said at the South Asia Commodities Forum of S&P Global (NYSE:SPGI) Platts.

Last month also, the minister blamed OPEC+ for high oil prices. we do not favour too low prices, we also do not support high prices, which deny energy access to millions in India," he said.

India imports about 85% of its oil needs and half of gas demand.

"If the world has to grow as a whole, there has to be a mutually supportive relationship between producers and consumers. It is in the interests of producers that oil-dependent economies keep growing steadily," Pradhan said.

India has been diversifying its energy sources to cut dependence on Middle Eastern producers, he said, adding the nation sees 'enormous potential' to strengthen its relations with the U.S., mainly on imports of liquefied natural gas (LNG).

The U.S. is one of the top ten oil suppliers to India, he said.

To meet its growing energy needs India is also investing $143 billion in domestic projects to boost local outputs and build oil and gas infrastructure including an 80% jump in refining capacity to 9 million barrels per day, he said.

Pradhan said the country is adopting cleaner energy sources to fuel its economic expansion but baseload will continue to be met by oil and gas.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Share of various regions in India's oil imports

https://tmsnrt.rs/3odhqte India's oil imports from key suppliers

https://tmsnrt.rs/2UWjVTn Opec's share of India's oil imports drop to record low

https://tmsnrt.rs/3m84LpS

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