India's 'strategy' to ignore Saudi Arabia, know what is the game of oil

1482657869the-game-of-oil-production-and-indias-strategy.jpg

By: Paromita Ghosh

Last Update: 2021-04-02 20:47:47 IST

  • Follow Us

India imports 85 per cent of its petroleum needs. In such a situation, supply and prices on a global scale make a big difference here. During the Corona period, oil producing countries decided to cut production after the demand fell and prices reached very low levels.

Saudi Arabia is seen to be overshadowing India's request for oil production cuts. The Center has asked all government refineries to review contracts related to the purchase of crude oil with Saudi. Also, companies have been instructed to finalize the deal on better terms.

In order to break the factionalism of the producing countries in terms of fixing prices and contract terms, the government has asked the Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation to step up the possibility of purchasing oil in other areas. Also, they have been asked to unite and talk to the suppliers on their terms.

India imports 85 per cent of its petroleum needs. In such a situation, supply and prices on a global scale make a big difference here. During the Corona era, oil producing countries decided to cut production after demand fell and prices reached very low levels. Continuing the cuts even after normal demand, crude oil prices began to rise. Last month, India urged Saudi Arabia to reconsider production cuts and increase production. This will help keep prices under control. 

Saudi ignored India's request. Even its minister advised India to use oil from its reserve. On this, Union Minister Dharmendra Pradhan said in two words that India has its own strategy about when and how to use its reserves. At that time, Pradhan had given a strong message to Saudi, saying that India was cautious about its interests.

Sources connected to the case say that Saudi and other OPEC countries have been India's main suppliers, but their conditions are often not in favor of the buyer. For example, Indian companies buy two-thirds of oil on fixed annual contracts. It is mandatory for the buyer to purchase the quantity fixed in the contract, while Saudi and other suppliers may reduce supplies when production is cut in the name of controlling prices. 

Why should the buyer pay for the OPEC decisions? Similarly, many other unilateral conditions are also imposed on the buyer company under the contract. In such a situation, it will definitely be beneficial for companies to move towards other options for purchasing oil.

Most Popular News
1962725154sourav-ganguly-says-he-is-obsessed-with-rishabh-pant.jpg

Rohit and Virat are good but this Indian batsman made me crazy: Sourav Ganguly

109103717delhi-capitals-have-the-players-to-win-ipl-mohammad-kaif.jpg

Delhi Capitals have IPL winning players, assistant coach claims

273404462amit-shah-pays-tribute-to-martyrs.jpg

Amit Shah pays tribute to martyred security personnel in Naxalite attack, CM Baghel is also present

1879227157moeen-ali-will-not-wear-logo-of-alcohol-brand.jpg

This logo was removed from CSK allrounder Moeen Ali's jersey

745627602what-is-your-prediction-for-today-saturday-april-3-2021.jpg

Daily horoscope: What is your prediction for today Saturday, April 3, 2021?

592906722sourav-ganguly-reveals-sehwag-taught-him-captaincy.jpg

Sourav Ganguly revealed, Virender Sehwag taught him the important lesson of captaincy

1009605849what-is-your-prediction-for-today-sunday-april-4-2021.jpg

Daily horoscope: What is your prediction for today Sunday, April 4, 2021?

558386254indian-naval-ships-receive-drdo-armour.jpg

Naval ships receive DRDO armour, rocket will divert enemy missiles in the air

1075993455prithvi-shaw-does-not-follow-instruction-advice-ricky-ponting.jpg

Coach Ricky Ponting accuses this cricketer of misbehavior, says- "This Indian player does not agree with me"

1406106518india-has-highest-no-of-billionaires-after-usa-and-china.jpg

Forbes List: Highest billionaire in India after America, China; Mukesh Ambani richest in Asia

Top 10 News

The Indian Voice

It's your choice

When we make the Guardian available to you online, we use cookies and similar technologies to help us to do this. Some are necessary to help our website work properly and can't be switched off, and some are optional but support the Guardian and your experience in other ways.

When we make the Guardian available to you online, we use cookies and similar technologies to help us to do this. Some are necessary to help our website work properly and can't be switched off, and some are optional but support the Guardian and your experience in other ways.

When we make the Guardian available to you online, we use cookies and similar technologies to help us to do this. Some are necessary to help our website work properly and can't be switched off, and some are optional but support the Guardian and your experience in other ways.

Yes, I’m happy Manage my cookies