NEW DELHI: India on Wednesday urged its long time ally Russia to take into account the interest of energy consuming nations during its engagement with Organization of the Petroleum Exporting Countries (Opec).

This was articulated by India’s petroleum minister Dharmendra Pradhan during a telephone call with Russia’s energy minister Alexander Novak after the Opec plus arrangement extended its compact for production cuts.

“During the telecall, Minister Pradhan conveyed his concern on the growing crude oil price volatility during the last few weeks, and also urged Russia to continue to play a balancing role in its engagement with OPEC countries by taking into account the interests of consuming countries," India’s petroleum ministry said in a statement on Wednesday.

This production cut extension will have a wide-ranging impact on energy markets, given that Opec accounts for around 40% of global production. It is expected to have a particular fallout on India due to Opec accounting for around 83% of the country’s total crude oil imports.

“Both the Ministers deliberated upon the way ahead to further strengthen India-Russia energy co-operation and in making hydrocarbon sector an important pillar of India-Russia Special and Privileged Strategic Partnership," the statement said.

This also comes against the backdrop of sanctions on Russia, where India owns stakes in significant hydrocarbon assets. Indian firms have invested $10 billion in acquiring stakes in hydrocarbon assets in Russia. Also, a consortium led by Russia’s Rosneft PJSC acquired Essar Oil Ltd for nearly $13 billion.

“The Ministers reviewed the investments in hydrocarbon sector recognizing that India and Russia are one of the largest investors in each others’ hydrocarbon sector. Minister Pradhan also conveyed India’s interest to further enhance footprints in the Russian E&P sector," the statement added.

India has been calling for a global consensus on “responsible pricing," with China and India moving ahead to set up a joint working group (JWG) on energy to form a buyers’ bloc to bargain collectively for oil supplies.

Collectively, OPEC plus will curb production by 1.2 million barrels per day (mb/d) for nine months until 31 March. This extension of production cuts also comes in the backdrop of supplies from Iran and Venezuela drying up from the Indian energy basket. With tension escalating in the Persian Gulf; India, the world’s third largest oil importer, has been trying to impress upon the Saudi Arabia-led cartel its concerns on volatility in crude oil prices and its impact on Indian consumers.

“Both the Ministers agreed to work closely in the coming months to develop a more comprehensive hydrocarbon engagement keeping in view a long-term perspective,"the statement added.

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