• 4 minutes End of Sanction Waivers
  • 8 minutes Balancing Act---Sanctions, Venezuela, Trade War and Demand
  • 11 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 14 minutes What Would Happen If the World Ran Out of Crude Oil?
  • 2 hours New German Study Shocks Electric Cars: “Considerably” Worse For Climate Than Diesel Cars, Up To 25% More CO2
  • 31 mins Permafrost Melting Will Cost Us $70 Trillion
  • 12 mins Russia To Start Deliveries Of S-400 To Turkey In July
  • 18 mins Nothing Better than Li-Ion on the Horizon
  • 2 hours UNCONFIRMED : US airstrikes target 32 oil tankers near Syria’s Deir al-Zor
  • 9 hours Countries with the most oil and where they're selling it
  • 42 mins Occidental Offers To Buy Anadarko In $57 Billion Deal, Topping Chevron
  • 10 hours Section 232 Uranium
  • 14 hours China To Promote Using Wind Energy To Power Heating
  • 3 hours ..
  • 1 hour How many drilling sites are left in the Permian?
  • 3 hours Iran Sabre Rattles Over the Straights of Hormuz
Can Saudi Arabia Still Sway The Oil Market?

Can Saudi Arabia Still Sway The Oil Market?

As large customers like China…

Oil Hits 2019 High On Iran Sanctions

Oil Hits 2019 High On Iran Sanctions

Trump’s decision to not extend…

Rupee Depreciation To Raise India’s Oil Bill By $26B

money on fire

A cheaper rupee could increase India’s crude oil bill by as much as US$26 billion in FY 2018/19, according to Indian government officials. The currency hit a low of 70.32 to the U.S. dollar today, which will also push up fuel prices at the pump and prices of cooking gas.

At the same time, Indian crude oil imports are set to rise: last financial year, the country imported 220.43 million tons of crude, with the bill coming in at US$87.7 billion This financial year, imports are estimated to reach 227 million tons while international oil benchmarks and the U.S. dollar rise higher and the rupee falls.

The FY 2018/19 oil import bill was at the start of the year estimated at US$108 billion on the basis of an average benchmark oil price of US$65 and an exchange rate of 65 rupees per dollar. However, oil has been trending higher than this for much of the year so far and supply concerns resulting from the U.S. sanctions against Iran and worry about spare production capacity among OPEC members are likely to keep it higher than US$65 until the end of the year at least.

Related: Indonesia’s Oil Sector In Jeopardy As Elections Loom

On top of higher benchmark prices, if the rupee remains around US$70 per U.S. dollar, the oil import bill could swell to US$114 billion. This would in turn pressure India’s economy further: the currency depreciation followed the latest trade deficit reading, which revealed India’s imports exceeded its exports by US$18 billion. This is the highest trade deficit since 2013.

Earlier this year, India called on OPEC to take action and bring oil prices down, or risk a demand crunch. OPEC obliged, agreeing with Russia in June to boost combined production by 1 million barrels daily. However, the agreement and the subsequent increase in Russia’s and some OPEC members’ production failed to have a substantial effect on prices, as Saudi Arabia surprisingly produced 200,000 bpd less in July and a round of U.S. sanctions against Iran came into effect.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News