New Delhi: India, the world’s third-largest oil importer, on Thursday pressed for assessing the impact of COVID-induced disruptions to global energy sector supply chains and said oil-cartel OPEC needs to address anomalies in the crude price differential for different regions. Speaking at the 4th high-level meeting of the India-OPEC Energy Dialogue, Oil Minister Dharmendra Pradhan said OPEC meets 78 per cent of India’s crude oil demand, 59 per cent of its LPG needs, and nearly 38 per cent of LNG consumption.

India imported USD 92.8 billion worth of hydrocarbons from OPEC countries in 2019-20.

The pandemic has impacted the global oil and gas industry by a significant impact on both oil demand as well as the supply side, creating an unprecedented global oil price volatility, he said.

“We are already seeing the signs of a second spell of lockdowns in several countries in Europe, and their immediate impact on crude prices,” he said. “In my view, it is essential for India and OPEC to take a deep look at the rapidly changing global energy landscape, particularly in oil and gas sector, and revisit the ongoing exchanges so that we can jointly address the energy challenges during the ongoing and in the post-COVID scenario.”

The pandemic and the resulting lockdowns evaporated demand around the globe, creating a glut that sent prices crashing.

“There is a need to assess the impact of COVID-induced disruptions to the global energy sector supply chains and calibrate our approach towards revival of energy sector,” he said.

Pradhan said India expects OPEC Secretariat to “increase its advocacy among its member countries to address the anomalies prevalent in the crude price differential declared by them for different geographical regions”.

He did not elaborate on the anomaly.

Traditionally, OPEC nations offer bigger discounts on crude oil sold to western economies in comparison to eastbound cargoes.

The minister said OPEC is critical for India’s energy requirement. “India truly values the positive relations that have evolved with OPEC over the years. OPEC has traditionally been an important supplier for our hydrocarbon requirements.”

The technical meeting held on November 2 between Indian oil companies and OPEC Secretariat discussed ground level realities, across the oil and gas industry in India.

“India’s energy sector has shown remarkable resilience in the face of the COVID-19 pandemic. Our energy demand has almost recovered back to pre-COVID levels, particularly for petroleum products,” he said, adding consumption of petrol, diesel and LPG has in October risen year-on-year.

“We anticipate that this recovery path in energy demand growth in India will sustain in the coming months,” he said.

OPEC has projected India to emerge as the leading energy consumer over the long term. In its recent World Oil Outlook 2020, it projected India to account for 16 per cent of the global economy by 2045, double that of today.

India’s oil demand is forecast to rise from 4.7 million barrels per day in 2019 to 10.7 million bpd by 2045, with its global share rising from 5.2 per cent to 10.8 per cent by 2045.

India, he said, attaches a lot of importance to the India-OPEC Institutional Dialogue. “Started five years ago in 2015, the dialogue has proven to be effective in promoting mutual understanding on key issues associated with the global oil sector”.

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