Crude oil price: Reduce crude oil prices or expect a drop in demand, India warns OPEC

NEW DELHI: The World's Fastest Growing Crude Consumer – India – Warns OPEC: Start Reducing Prices, or Declining Demand Will Mean a Reduction in Cartel Purchases gross.

This is at least the suggestion of Sanjiv Singh, president of Indian Oil Corporation, the country's largest refiner. If prices continue to rise at the same rate as in the past month and a half, Indian consumers will likely see alternatives such as electric vehicles and gas more profitable, replacing 1 million barrels a day in the past. Here 2025, he said.

"Demand can not be viewed in isolation from prices, especially for a price-sensitive market like India," said Singh. "You can not see an impact on demand in the short term, but in the long run, it will certainly have implications."

Fears of a tightening of global supply following the disruptions in service of Libya and Venezuela in Canada have resulted in a nearly 5% increase in oil since April. While the Organization of Petroleum Exporting Countries and its allies have agreed to tighten restrictions to ease the burden, concerns remain that additional barrels will not be enough to meet growing demand, prompting the US president Donald Trump tweeting a series of tirades.

Singh says that India's oil consumption will reach 10 million barrels a day by 2040, making it the fastest consumer in the world, baduming prices will reach 83 dollars the barrel of here 2025 and 113 dollars by 2040. with crude already close to $ 80, it is likely that the cost will be considered too expensive, reducing demand over the next seven years, has he said.

INTERESTS WANTED

"If instead of $ 83, prices reach $ 100 by 2025, other forms of energy will become more competitive," said Singh.

India has a direct interest in lowering oil prices. With a little of its own natural resources, the country imported about 1.6 billion barrels (220.43 million tons) of oil last year, mostly from the OPEC countries. Now that prices have reached their highest level in three years and that Brent has increased by 36% since the beginning of last year, OPEC and its allies, including Russia, have begun to reduce their production.

Indian Oil, also the largest fuel retailer in the country, is preparing for alternatives to crude oil by developing natural gas, renewable energy and electricity to power the vehicles. It is building a liquefied natural gas import terminal in southern India, has about 202 megawatts of renewable energy capacity from solar and wind projects and is testing the first bus-based power plant. Hydrogen from Tata Motors Ltd.

THE STRETCH


But arguing that alternative energy is enough to help replace 1 million barrels a day could be a bit of an exaggeration, says Abhishek Kumar, a senior badyst at the University of Toronto. energy at Interfax Energy.

"The growing economy of India will propel its demand for gasoline and diesel, and it will not be easy to find alternatives," Kumar said. Natural gas used as transportation fuel "should not call into question the predominance of petroleum products until India is self-sufficient in natural gas production, which is at best a long-term prospect. The pressure is on the OPEC to make more key customers, including India. "

Singh says that OPEC is aware of these threats.

"It's not that they do not realize," said Singh. "We told them, do not think that growth will come only because everyone is planning it, it is strongly linked to prices."