India, the world’s third-largest consumer of crude and a key market for many OPEC members, is once again urging OPEC to phase out its production cuts. In a virtual meeting with OPEC secretary-general Mohammed Barkindo on June 24, Indian oil minister Dharmendra Pradhan, raised his country’s concerns over increasing oil prices and subsequent inflation. This is not the first time Pradhan called on OPEC to review its output cuts, giving favour to India.
Along with his request of phasing out production cuts, Pradhan also asserted that crude prices should remain within a reasonable band, which will be in the collective interests of both consumers and producers and would encourage a consumption-led recovery, the Petroleum Ministry statement said.
“We discussed recent oil market developments, trends in oil demand recoveries, economic growth forecasts and overcoming energy challenges,” Pradhan said after the meeting.
While Barkindo did not address Pradhan’s concerns directly, OPEC’s secretary-general said the outlook was improving for the world economy and that the OPEC+ alliance planned to continue to meet monthly to review market conditions and adjust production levels accordingly.
OPEC, Russia and several other allies in a production accord are set to meet next week to decide on output quotas for August and possibly beyond. According to analysts, it is expected that the alliance will agree on a production increase of 500,000 to 700,000 b/d for August, which would still fall short of the expected deficit between global oil demand and supply.
