3 min read.Updated: 15 Jul 2021, 10:31 PM ISTLivemint
Both Saudi Arabia and UAE are member of the Opec, which accounts for a major part of India’s total crude oil imports and 40% of global production. These calls assume importance given that diesel and petrol prices have already breached the ₹100 mark in several parts of India.
India reached out to Saudi Arabia, the world’ largest oil producers, with the newly appointed Union cabinet minister Hardeep Singh Puri on Thursday having a telephone conversation with West Asian nation’ energy minister Prince Abdul Aziz bin Salman Al Saud.
Puri, a 1974 batch Indian Foreign Service (IFS) officer who has been put in charge of country’ energy security had a telephone conversation with United Arab Emirates (UAE) industry and advanced technology minister Dr. Sultan Ahmed Al Jaber on Wednesday.
These calls come in the backdrop of reports of the UAE reaching a compromise with the Organisation of the Petroleum Exporting Countries (Opec) grouping on increasing the volume of oil it can pump, as part of a larger compact within the Opec plus grouping comprising of 23 countries including Russia and allies. This compromise followed after there was no agreement on oil production with differences between Saudi Arabia and UAE.
“Had a warm and friendly discussion with His Royal Highness, Prince Abdul Aziz bin Salman Al Saud, Minister of Energy of Saudi Arabia on strengthening bilateral energy partnership and developments in the global energy markets," Puri said in a tweet on Thursday.
Both Saudi Arabia and UAE are member of the Opec, which accounts for a major part of India’s total crude oil imports and 40% of global production. These calls assume importance given that diesel and petrol prices have already breached the ₹100 mark in several parts of India. India has been flagging its concerns over the increasing global crude oil prices and requesting phasing out production cuts to Opec.
“Saudi Arabia is a central player in international energy market. I conveyed my desire to work with His Royal Highness Prince Abdulaziz to bring greater predictability and calm in the global oil markets, and also to see hydrocarbons become more affordable," Puri said in another tweet.
The world’s biggest oil producer, Saudi Arabian Oil Co. (Saudi Aramco) plans to buy a 20% stake in Mukesh Ambani controlled Reliance Industries Ltd’ flagship chemicals and refining business. Also, Yasir Al-Rumayyan, chairman of Saudi Aramco and the Governor of the Public Investment Fund, has joined the board of Reliance as an independent director.
“Highlighted the crucial role of Saudi Arabia in rapidly growing energy needs of India in the coming years, and my strong desire to work with His Royal Highness to further diversify our bilateral strategic energy partnership beyond buyer-seller to see greater two-way investments," Puri said in another tweet.
While Saudi Aramco also partnered with Indian state-run oil companies for setting up the world's largest oil refinery and petrochemical complex in Ratnagiri, the project has hit the skids, after protests from farmers and Shiv Sena which is in power in Maharashtra with its alliance partners.
“Conveyed my desire to work closely with UAE and other friendly countries to bring a sense of calm, predictability and realism among other suppliers in the energy market to make it more affordable for consumers," Puri said in a tweet on Wednesday.
Jaber is also the managing director and chief executive of state-owned Abu Dhabi National Oil Company (Adnoc), one of the only two firms to commit to India’s crude oil reserve programme till date.
With three million barrels per day of crude oil production, Adnoc is the world’s 12th-largest producer. India is the world’s third-largest oil importer and the fourth-largest buyer of liquefied natural gas (LNG) and has been building on its relationship with the West Asian nation. Adnoc earlier awarded the exploration rights for the Abu Dhabi Onshore Block 1 to an Indian consortium of state-run Bharat Petroleum Corp Ltd and Indian Oil Corp Ltd.
Diversifying India’ energy basket with crude oil supplies from non-Opec sources is part of India’ energy security efforts. India is particularly vulnerable as any increase in global prices can affect its import bill, stoke inflation and widen trade deficit. Following the covid outbreak, crude prices for Indian basket of crude had plunged to $19.90 in April last year during the first wave before recovering to 71.98 a barrel in June, data from the Petroleum Planning and Analysis Cell showed.
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