New Delhi: India, the world’s third-largest energy consumer after the US and China, will host the 16th International Energy Forum Ministerial (IEF—16), that will be inaugurated by Prime Minister Narendra Modi on Wednesday.

The ministerial comes in the backdrop of a supply cut by the Organization of the Petroleum Exporting Countries (Opec) and Russia that has led to a rally in global oil price. This has resulted in the cost of Indian basket of crude, which averaged $47.56 a barrel in 2016-2017, touching $63.80 (average price) in March 2018, according to information from Petroleum Planning and Analysis Cell. Extreme volatility has marked crude oil prices, which reached a record $147 per barrel in July 2009.

The Indian basket represents the average of Oman, Dubai and Brent crude.

“Covering all six continents and accounting for around 90% of global supply and demand for oil and gas, the IEF is unique in that it comprises not only consuming and producing countries of the IEA and Opec, but also Transit States and major players outside of their memberships, including Argentina, China, India, Mexico, Russia and South Africa," the Indian government said in a statement on Monday.

The ministerial hosted by India also assumes significance given that the country’s energy needs are primarily met through imports, with India importing 214 million tonnes of crude oil in 2016-17.

“Sellers also need a steady and stable buyers’ market. India fulfils that need," said an Indian government official closely involved in evolving the country’s new energy security paradigm, requesting anonymity.

This also comes at a time when India has been pushing for a gas based economy. India, the world’s fourth-largest liquefied natural gas (LNG) importer, has been trying to leverage the glut in global LNG supplies to renegotiate its contracts. Indian firms have been exploring strategies such as time swap of volumes, destination swaps and contract on free on board basis to reduce the final fuel price. India imported 19 million metric tonnes of LNG in 2016-17.

Also, India has been recalibrating its crude sourcing strategy and sourcing heavy crude from Latin America as part of its strategy to become a preferred refining hub. It also sourced crude oil from US last year.

“The International Energy Forum (IEF) aims to foster greater mutual understanding and awareness of common energy interests among its members. Its 72 Member Countries are signatories to the IEF Charter, which outlines the framework of the global energy dialogue through this inter-governmental arrangement. Apart from them, 20 countries are also participating in this meeting as special invitees," the statement added.

The ministerial will be attended by Dharmendra Pradhan, India’s petroleum and natural gas minister; Khalid Al-Falih, Saudi Arabia’s petroleum and mineral resources minister; Suhail Mohamed Al Mazrouei, United Arab Emirates’s energy and industry minister; Bijan Namdar Zangeneh, Iran’s petroleum minister; Mohammed Bin Saleh Al-Sada, Qatar’s energy and industry minister; Emmanuel Ibe Kachikwu, Nigeria’s minister of state for petroleum resources; and Kosaburo Nishime, Japan’s state minister of economy, trade and industry.

As a major consumer, India is trying to leverage its position to seek reasonable rates. New Delhi is also reworking its import strategy by stepping up the share of short-term contracts whenever the market is favourable and exploring long-term supply deals at discounted prices as its new energy architecture evolves.