Read on the application
India is concerned about Russia’s continued cuts in crude oil production to comply with the OPEC+ agreement, even from assets where Indian state-owned companies have stakes. “Russia has cut production as part of OPEC+. Though India is not part of it, production cuts are being done in which foreign entities are participating,” said a person familiar with the matter on condition of anonymity. The decline has also reduced Russian production, the amount of oil available on the global market.
However, another government official said India was not “unduly” concerned about the development. “Everybody will cut production, because they want the price to go up, but they also need to sell. We raise it all the time for the Russians.” The world is facing oil shortages due to Iran and Venezuela’s oil embargo.” The world’s third-largest oil importer, India, has expressed concern over rising oil prices amid an uncertain global economic recovery.
Also Read: Be sure to check petrol and diesel prices before leaving home, as crude oil has crossed $92.
ONGC Videsh Limited (OVL), Bharat Petrosources Limited, Indian Oil Corporation Limited (IOCL) and Oil India Limited (OIL) have invested a total of $16 billion in Russia. While Oil and Natural Gas Corporation (ONGC) Ltd’s foreign unit OVL holds a 20% stake in the Sakhalin-1 hydrocarbon block, a consortium of OVL, OIL, IOCL and Bharat Petrosources holds a 49.9% stake in Rosneft’s VanCJ subsidiary. , besides, another consortium comprising OIL, IOCL and Bharat Petrosources LLC owns 29.9% stake in Tas-Yuryakh.
India will be hit hard
India imports more than 80% of its oil requirements and production cuts have driven up oil prices. India is particularly vulnerable, as any rise in global prices could hit its import bill, fuel inflation and widen the trade deficit. India’s import of crude oil and petroleum products will grow by 29.5% to $209.57 billion in 2022-23.
India is also looking to reduce its dependence on crude oil amid growing volatility in the energy market and voluntary cuts by major oil producers. The recent launch of a global biofuels alliance with India is seen as a step in that direction. A Petroleum Ministry statement on September 11 said the alliance would help reduce the world’s dependence on petrol and diesel.