India on Thursday raised its concerns about global price swings due to the OPEC plus bloc's decision to extend crude production cuts with Saudi Arabia and requested the world's No. 1 oil exporter to continue its leadership role in maintaining market balance, the country's oil ministry said.
Oil Minister Dharmendra Pradhan raised New Delhi's concerns to Saudi Arabian energy minister Khalid al-Falih during a bilateral meeting in the capital Thursday.
Pradhan said in a tweet after the meeting with Falih that he had "raised my concerns on the recent increase in Asian Premium, disturbances in the Strait of Hormuz impacting the movement of oil/LNG tankers."
Falih briefly stopped in New Delhi for his third visit to India in 2019, as he headed to China.
Pradhan highlighted the world's third-biggest crude importer's concerns on price volatility and its adverse impact on the Indian economy to Falih during an hour-long meeting.
The Indian minister advocated that a responsible price mechanism was in the larger interests of all nations.
"Falih emphasized the need for capitalizing on the growing momentum in bilateral hydrocarbon cooperation," the ministry said in a statement.
STRATEGIC RESERVES
Pradhan invited Saudi Aramco to take part in India's strategic oil reserve program.
By 2026, India aims to have oil reserves of 87 million barrels to meet exigency demand.
At present, India can meet an emergency oil demand for around 10 days through 39 million barrels of strategic reserve capacity while all refiners maintain storage capacity of 64 days.
The total storage capacity at the disposal of India stands at 74 days, which is far short of International Energy Association's (IEA) mandate of 90 days.
India's dependence on imported crude and natural gas stood at 83.7% and 47%, respectively, in the last fiscal year, which ended March 31.
DOWNSTREAM TIES
The ministers reviewed the progress of a refinery and petrochemical complex project on the west coast of India where Saudi Aramco and Abu Dhabi National Oil Co. (ADNOC) will have equal shares in a 50% stake, while the other 50% will be jointly held by three state-run refiners - Indian Oil Corp. (IOC), Hindustan Petroleum Corp. (HPCL), and Bharat Petroleum Corp. (BPCL).
When commissioned in 2025, the refinery will have a processing capacity of 1.2 million b/d and produce around 18 million mt/year of petrochemicals products.
In February, Saudi Arabia pledged to invest $100 billion in India, with the bulk of the funds going toward infrastructure and the energy sector, including downstream segments like refining and petrochemicals.
Saudi Arabia's plan to build a large downstream presence in India has been viewed as a key part of a strategy to consolidate its position in the fast-growing economy.
