India would like to have more opportunities to work for diversifying its sources of crude, including by resuming oil imports from Venezuela and Iran under President Biden, according to India’s Oil Minister Dharmendra Pradhan.
Speaking at a webinar on Wednesday, the Indian minister said, as carried by Reuters, “As a buyer I would like to have more buying places. I should have more destinations to go for purchasing (oil).” Pradhan was replying to a question whether he hopes the Biden Administration would ease the current strict sanctions against the two OPEC producers, Iran and Venezuela.
The Trump Administration has been stepping up sanctions against Iran and Venezuela since 2018, looking to cut off oil sales from the two countries.
Joe Biden, however, has pledged to offer Tehran a path back to diplomacy and a return to the nuclear deal. That is, if Iran returns to full compliance with that agreement, hammered out while Biden was President Obama’s vice president.
After the sanctions on Iran and Venezuela’s oil exports were tightened last year to include anyone dealing with crude from those two producers, India stopped importing oil from Iran in May 2019 and has significantly cut purchases from Venezuela.
Reliance Industries, the owner of the largest refinery in India and the world, stopped buying Venezuelan crude oil in June this year. Reliance Industries is not alone in shunning Venezuelan oil, fearing repercussions from Washington. India’s second-largest refiner, Nayara Energy, has also stopped buying Venezuelan crude, switching to Canadian, Kuwaiti, and Ecuadorian oil, according to Bloomberg shipping data.
India, the world’s third-biggest oil importer, relies on imports for more than 80 percent of its crude consumption, with Middle Eastern crude accounting for nearly 80 percent of its imports.
Last month, Pradhan urged OPEC to review its pricing policies for the Asian market and end the premium it puts on its crude for Asia.
By Tsvetana Paraskova for Oilprice.com
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India never stopped buying Iranian crude oil via barter trade or/and ship-to-ship transfers and Venezuelan crude via Russian entities.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
USD currency is weaker by 15% since March of this year. a weaker USD means higher commodity/oil prices.
petrol prices in Mumbai city/india is the highest in the world even in USD terms. today's prices is Rs 90/ litre and this translates to almost $5 a gallon ($ 4.9 /gallon to be precise.)
The impact of this to end consumers is reflected in Food price inflation. For example, essential agri/farm produce like Onion(which is considered by law an essential commodity in india) is quoting at $1/kilo at retail outlet double the usual retail price.
Contractions: OPEC is raising concerns about oil glut, if this is true why then are they (Middle east exporters) charging premium prices for exports of crude oil to india?
It is obvious oil politics has nothing to do with supply- demand and other laws of economics, it is just politics.
I watch CNBC bond report which covers USD and accordingly know if the currency compass is pointing north or south for usd. at the moment usd is weaker against yuan, euro, Sterling pound aus dollar. bullish for oil
Good thing for india is there is sufficient Forex reserves to meet import bill, unlike what happened in the 1990s.