New Delhi: – India has made preparations to teach a lesson to the countries, increasing oil prices by keeping the production low, despite the rising demand. Accordingly, India has reduced oil purchase from Saudi by 25%. The Indian government has ordered the oil companies not to depend entirely on Saudi for the oil but search for alternatives. The action has already started and an oil tanker carrying 1 million barrels of oil has left the Latin American country Guyana for India. Indian Petroleum Minister Dharmendra Pradhan announced that India would be purchasing oil on a large scale from African countries. This decision is a lesson for Saudi and other Gulf countries exporting maximum crude to India.
The oil demand around the world declined against the backdrop of the Coronavirus. Therefore, OPEC, the organisation of oil-producing countries, had decided to reduce oil production. But now, the oil demand is growing. In this scenario, India requested OPEC to increase oil production. But OPEC ignored the request from India, the third-largest importer and consumer of oil in the world. Indian Petroleum Minister Dharmendra Pradhan directed his appeal for an increase in the oil production to OPEC. More particularly, to Saudi Arabia, which has a strong influence over OPEC. Pradhan pointed out that the artificial price increase is having an impact on the Indian economy. The Saudi fuel Minister had recorded an aggressive reaction over this.
The Saudi fuel Minister retorted that if India wants cheap fuel, it should dig into its strategic fuel stocks, built while the prices were low, in the last year. After that, the disputes between India and Saudi over the fuel rates increased. India decided to reduce the oil imports from Saudi by 25%. Saudi started efforts to ensure that India did not implement the decision.
But India, importing 85% of the oil requirements of the country, is forced to take come tough decisions on this front. India purchased oil worth a whopping $120 billion in the last year. India has prepared to ensure that the current year’s oil bill does not exceed the last year’s amount.
Accordingly, India has started working on alternatives to reduce its dependence on Saudi and the Gulf countries for the oil requirements. The buying country must have the option of buying oil when the oil rates are low. But India is not getting this facility from Saudi and the Gulf countries while purchasing oil. Given the country’s future interests, it will be beneficial that oil is purchased from countries offering this facility. Therefore, some of the officials said that it becomes necessary for India to explore the option of purchasing oil from African and other countries.
An oil tanker carrying million oil barrels, which left the Latin American country of Guyana, will soon reach India. India has also decided to increase oil purchase from the United States and Russia. India purchases nearly 15% of the oil from African countries. The Petroleum Minister announced that this share would be increased. India has been purchasing oil for a long time from the African countries Nigeria, Angola, Algiers and Egypt. Now India is increasing oil purchase from Ghana, Chad and Cameroon. The media are raising the question of whether this will strain the relations between India and Saudi. But except for dispute over oil production and rates, the relations between India and Saudi have been friendly. The importance of India-Saudi relations has increased further, given the atmosphere of uncertainty prevailing in the Gulf region.
A few months ago, the Indian Army Chief had visited Saudi Arabia. Both the countries agreed, during the meeting, on strengthening bilateral defence ties. Reports of joint war exercises between the Indian and Saudi Arabian military were also published. It was also clarified that Saudi would invest $100 billion in India. In this situation, the intensifying dispute between India and Saudi over the oil rates is not in the interest of both countries. Indications have been received that both countries have acknowledged this. A few days ago, Saudi Crown Prince Mohammed Bin Salman held telephonic discussions with the Indian Prime Minister.