NEW DELHI: Indian refiners can leverage their mixed consumption to hunt higher phrases for subsequent yr’s annual contracts with suppliers, particularly Russia, as a gloomy demand outlook subdues oil costs, a senior petroleum ministry official mentioned on Thursday.
“We have seen IEA (International Energy Agency) and all such agencies lowering demand outlook in recent times.But India has emerged as a major (demand) growth centre,” he mentioned, alluding to the rising measurement of India’s consumption — pegged at about 5 million barrels/day — provides a substantial market for suppliers in a tepid market.
On joint negotiations by the refiners with Russia, the official mentioned “talks” amongst them “are ongoing”. Indian refiners signal annual contracts with main suppliers for a part of their requirement and meet the remainder by means of spot buy.
The concentrate on Russia stems from the truth that it has turn out to be India’s prime oil provider due to reductions supplied in the wake of Western sanctions and a $60 per barrel value cap, imposed after Moscow’s 2022 invasion of Ukraine, curbed markets for the Russian barrels. State-run refiners principally purchase Russian oil by means of spot tenders.
The same try by state-run refiners to safe higher phrases from the Middle-East suppliers about 15 years again had come a cropper.
But the official mentioned a contract is greater than the worth, which follows benchmarks. “For example, one can seek discounts, longer payment credit period, destination flexibility (allowing diversion cargo to another port in India) and other terms,” he mentioned.
Both OPEC, accounting for 40% of worldwide traded oil, and the IEA have in current occasions pruned their 2024 demand progress forecast. In distinction, IEA’s oil market report on India has mentioned the nation will contribute a third of the worldwide oil consumption progress by means of 2030 to overhaul China.
For the primary time in two years, benchmark Brent crude dropped beneath $70 per barrel final week as concern of oversupply grew amid poor present by the main economies, particularly China, the world’s second-largest oil client. On Thursday, nevertheless, Brent rebounded to hover just under $75, buoyed by the US curiosity minimize.
“We have seen IEA (International Energy Agency) and all such agencies lowering demand outlook in recent times.But India has emerged as a major (demand) growth centre,” he mentioned, alluding to the rising measurement of India’s consumption — pegged at about 5 million barrels/day — provides a substantial market for suppliers in a tepid market.
On joint negotiations by the refiners with Russia, the official mentioned “talks” amongst them “are ongoing”. Indian refiners signal annual contracts with main suppliers for a part of their requirement and meet the remainder by means of spot buy.
The concentrate on Russia stems from the truth that it has turn out to be India’s prime oil provider due to reductions supplied in the wake of Western sanctions and a $60 per barrel value cap, imposed after Moscow’s 2022 invasion of Ukraine, curbed markets for the Russian barrels. State-run refiners principally purchase Russian oil by means of spot tenders.
The same try by state-run refiners to safe higher phrases from the Middle-East suppliers about 15 years again had come a cropper.
But the official mentioned a contract is greater than the worth, which follows benchmarks. “For example, one can seek discounts, longer payment credit period, destination flexibility (allowing diversion cargo to another port in India) and other terms,” he mentioned.
Both OPEC, accounting for 40% of worldwide traded oil, and the IEA have in current occasions pruned their 2024 demand progress forecast. In distinction, IEA’s oil market report on India has mentioned the nation will contribute a third of the worldwide oil consumption progress by means of 2030 to overhaul China.
For the primary time in two years, benchmark Brent crude dropped beneath $70 per barrel final week as concern of oversupply grew amid poor present by the main economies, particularly China, the world’s second-largest oil client. On Thursday, nevertheless, Brent rebounded to hover just under $75, buoyed by the US curiosity minimize.
