India Raises Concerns Over Volatility in Global Oil Prices
India, the world’s third largest oil importer and consumer, has expressed its concerns about the volatility of global oil prices to major oil producers and organizations, according to Indian Oil Minister Hardeep Singh Puri. The Indian government has been engaging in bilateral discussions with oil-producing countries, as well as with the Organization of the Petroleum Exporting Countries (OPEC) and other international bodies, to convey the country’s serious concerns about crude oil price volatility. India is advocating for responsible and reasonable pricing that benefits consumer countries. OPEC and its allies, collectively known as OPEC+, have been implementing supply limits since late 2022 to stabilize the market. In June, they extended these supply curbs into 2024. Additionally, Saudi Arabia and Russia recently made extra commitments outside of the OPEC+ agreement to support crude prices. As a result of these efforts to tighten supply, oil prices have experienced a rally, with Brent crude trading close to its January highs. Currently, Brent crude is priced at $87.32 a barrel, while West Texas Intermediate crude (WTI) stands at $84.03. However, in India, high oil prices have impacted the profitability of government-controlled retailers. These retailers have not revised the pump prices of petrol and diesel since last year to protect customers and curb inflation. The three state-run refiner and fuel retailers in India, Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum Corp, dominate the fuel retailing sector in the country. India’s concerns over volatile oil prices highlight its efforts to ensure stability in the energy market and protect its economy from excessive price fluctuations.
Osaka Gas, Sumitomo Near Deal for Think Gas Stake, Sources Say
Osaka Gas Co. and Sumitomo Corp. are nearing a deal to buy about a 30% stake in Think Gas Distribution Pvt. that could value the Indian natural gas supplier at as much as $1.5 billion, according to people familiar with the matter The consortium of Japanese firms may reach an agreement with Think Gas’s backer I Squared Capital as soon as September, said the people, who asked not to be identified as the information is confidential. Bloomberg News reported in March that the private equity firm was working with an adviser on a potential sale of as much as 30% of Think Gas. Though deliberations are advanced, I Squared could still decide against proceeding with the deal, the people said. Representatives for I Squared Capital, Osaka Gas and Sumitomo declined to comment, while Think Gas didn’t immediately respond to requests for comment. Established by I Squared in 2018, Think Gas operates across 13 districts in India and supplies natural gas to the domestic, commercial, industrial and automotive sectors, according to its website. In 2021, the infrastructure focused I Squared invested about $200 million in Singapore-based AG&P City Gas, another city gas distributor in India that has 12 concessions in the country.
India Will Continue To Buy Russian Oil Even As Prices Climb
India continues to buy a lot of Russian oil despite a significant narrowing in its discount to Brent, Bloomberg has reported, citing sources from local refiners. In early August, the price of Russia’s flagship Urals blend delivered to the west coast of India hit $81 per barrel. Just a month earlier that price was around $68, Argus pricing data cited in the report shows. Purchases, however, have not slowed down because, according to Bloomberg sources, comparable oil blends from Middle Eastern producers cost more. “There was a perception that India had limited capacity to refine medium sour grade of Russian crude, which would create a natural ceiling on Russian imports,” a Citi analyst told Bloomberg. “It has now been clearly demonstrated that such a bottleneck does not exist. This would imply that Indian refiners can continue with their Russian oil imports as long as discounts outweigh the higher logistics cost of imports,” Samiran Chakraborty, chief India economist at the Wall Street bank, also said. Last year, Russian exports of crude oil to India rose tenfold from the previous year, the Indian Bank of Baroda reported earlier this year. This year, shipments of Russian crude to the subcontinent remained strong, putting Russia at the number-one spot as oil supplier to India, replacing Saudi Arabia. In June, Russian oil exports to India hit a record high of 2.2 million barrels daily, Kpler data cited by the Indian Express showed. In July, exports were expected to ease, as a result of greater demand at home and lower demand in India amid the monsoon season, which also coincides with partial refinery shutdowns for maintenance. Once the monsoon is over, however, Kpler expects a rebound in Russian oil shipments to India, with analyst Viktor Katona forecasting “a deluge of Russian cargoes in India from October onwards.” “As long as there is any discount on Russian crude versus comparable grades on a landed basis, there will be demand for it in India,” energy analyst Vandana Hari from Vanda Insights told Bloomberg.
India aims to triple natural gas share to 15% by 2030: Minister
India has embarked on an ambitious trajectory to amplify its existing 6% share of natural gas in the energy amalgam to a formidable 15% by 2030, as the government presses forward with a suite of comprehensive measures, said minister of state in the ministry of petroleum & natural gas, Rameswar Teli. In a written reply in the Lok Sabha, the minister said, “various steps have been taken by the government to raise the share of natural gas in energy mix to 15% in 2030 from about 6% currently.”