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India is holding a series of telephone conversations with US Secretary of Energy Rick Perry on Monday to discuss the oil price volatility created in part by the perception of a tighter oil market in the wake of US sanctions on India’s neighbor, Iran, according to a press release from India’s Ministry of Petroleum & Natural Gas.
India’s Minister of Petroleum and Natural Gas Dharmendra Pradhan also discussed crude oil purchases from the United States, and ways to “further develop gas-based economy in India.”
The spot price of a Brent barrel fluctuated between $60 ad $64 in the last week alone. While it has come down substantially since mid-May when Brent was sitting around $72 to barrel, oil prices are still up significantly from the lows this year in January when prices were closer to $50 per barrel.
The higher prices are a significant concern for India, who has a high import need for crude. In 2018, India imported the third-highest volume of crude oil by value after China and the United States.
Secretary Perry and Minister Pradhan also discussed the important role that the United States has in establishing the global oil price stability.
Reports in late May suggested that India may decide to resume oil purchases from Iran, after India’s Prime Minister Narendra Modi won the country’s elections, according to an Indian news outlet.
India is feeling the pinch of the US sanctions on Iran after the US refused to renew the sanction waivers that it had granted to eight large Iranian oil buyers, including India. For now, Indian refineries have made up for the loss of Iranian barrels by increasing its purchases of oil from Saudi Arabia and Kuwait, according to Sputnik. Some Iranian oil is still trickling into India that was purchased prior to the end of the sanction waiver expiration, the outlet reported.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.