High oil prices risk repeat of 2008 oil market crash – Indian oil minister
Extension of oil output cuts by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) through the end of 2023 could lead to "unintended consequences", India’s petroleum and natural gas minister Hardeep Singh Puri said.
PHOTO: Red barrels of oil lie on the background of Indian rupees. Getty Images
Global energy market needs a balance to ensure that crude oil prices “do not outstrip the paying ability of consuming countries,” Puri said, while addressing the Abu Dhabi International Petroleum Exhibition & Conference (ADIPEC).
The oil minister called on OPEC+ producers to be considerate of consuming countries like India as crude oil prices exceeded $95/bbl in September and were on track to reach $100/bbl. This was due to global supply constraints triggered by output reductions and export curbs pledged by Saudi Arabia and Russia.
"Cumulatively, OPEC & OPEC+ have reduced the availability of oil by 4.96 million b/d, comprising 5% of global oil demand, from the market since 2022, spiking brent prices from $72/bbl in June to $97/bbl in September 2023," Puri said on social media platform X (formerly Twitter).
"During pandemic, when crude oil prices crashed, the world came together to stabilise the prices to make it sustainable for the producers," the oil minister said after meeting OPEC’s secretary general Haitham Al Ghais at the conference.
"Now, as the world is at cusp of economic recession and slowdown, oil producers need to show same sensitivity towards the consuming countries," Puri added.
Meanwhile, on Wednesday, Saudi Arabia and Russia reaffirmed extending voluntary supply cuts till the end of this year as the oil-producers group decided to keep its current oil production levels unchanged.
The oil minister argued that higher oil prices could lead to inflationary pressures and prompt global central banks to increase interest rates, which in turn would hinder global oil demand.
India imports about 60% of its crude oil and other petroleum products imports worth $101 billion from OPEC producers, Puri said.
By Aparupa Mazumder
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