Asia

India Warns of Impending Threat to World Economy Due to Unsustainable Oil Prices

India, the world’s third-largest oil buyer, has asked the Organization of Petroleum Exporting Countries (OPEC) to fill the supply gap and ensure sustainable oil prices, as politics affect the output of some producers.
Sputnik

New Delhi (Sputnik) — India's Minister of Petroleum and Natural Gas Dharmendra Pradhan, while speaking at the OPEC forum in Vienna, said that trade wars, geopolitical events and the threat of instability returning to the Euro Zone, combined with the existing level of oil prices, will pose a grave threat to the already fragile world economy.

READ MORE: Oil Price to Reach $100 by Summer 2019 Thanks to Trump – Analyst

"While we are not in favor of prices as low as $30 per barrel, we also do not support the prevailing high price which dents our fiscal balance and undermines our development process. They also cause undue hardships, particularly to those at the bottom of the pyramid in developing and least developed countries," India's Petroleum Minister Dharmendra Pradhan said at the OPEC forum in Vienna.  

India-China Join Hands to Counter OPEC’s Dominance in Asian Oil Market
Crude prices have witnessed a steep rise due to the likelihood of lower oil exports from Iran, as US President Donald Trump pulled out of a 2015 nuclear accord and imposed additional sanctions on the country that is OPEC's third-biggest producer.

"Price of oil and gas have become subject to vagaries of geopolitics. Political conditions, sometimes internal and sometimes external, result in the reduced output of some countries," the Indian petroleum minister added.

READ MORE: Sudan Planning to Improve Oil Production to Feed Refineries — Minister

As India's oil import bill ballooned against the backdrop of higher crude prices, the country's trade deficit in May widened to $14.62 billion, the highest in four months.

Rising global oil prices had pushed up the average cost of the Indian basket of crude to $75.31 per barrel in May 2018, according to data from the Petroleum Planning and Analysis Cell. Opposition parties and commoners have been calling on the government to curtail taxes on petroleum products as petrol prices have hit an all-time high.

Discuss