India says ‘we expect more’ as OPEC+ agrees to ease oil output cuts slightly from May
- The OPEC+ group has agreed to ease oil output by 350,000 barrels per day (bpd) in May, another 350,000 bpd in June, and a further 400,000 bpd or so in July.
The ministry of external affairs on Friday said that the country expected further relaxation in oil output cuts a day after the Organization of the Petroleum Exporting Countries, Russia, and their allies, a group known as OPEC+, agreed to gradually ease its output cuts from May.
“India has been appealing to OPEC and OPEC+ to ease crude oil production cuts that were announced last year. We believe crude supply should be market-determined rather than artificially managed. OPEC & OPEC+ have announced slight easing off last week but we expect more,” MEA spokesperson Arindam Bagchi was quoted as saying by news agency ANI.
Bagchi’s statement comes in the backdrop of the easing of production curbs announcement by OPEC+, which has been implementing deep cuts following the oil price collapse triggered by the coronavirus pandemic since last year. The group has agreed to ease oil output by 350,000 barrels per day (bpd) in May, another 350,000 bpd in June, and a further 400,000 bpd or so in July.
As per the deal announced on Thursday, the cuts implemented by the OPEC+ would be just above 6.5 million bpd from May, compared with slightly below 7 million bpd in April, according to news agency Reuters.
"What we did today is, I think, a very conservative measure,” Saudi energy minister Prince Abdulaziz Bin Salman was quote as saying by Reuters. He added that output levels could be adjusted at the next meeting on April 28.
Earlier in the day, India has asked its state refiners to review contracts they enter into for buying crude oil from Saudi Arabia negotiate more favourable terms, a top official told news agency PTI. The government has told Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) to look for oil supplies from outside the Middle East region and use collective bargaining power to get favourable terms to break producers cartel dictating pricing and contractual terms, PTI reported.
"While buyers have an obligation to lift all of the contracted quantity, Saudi and other producers have the option to reduce supplies in case OPEC decides to keep production artificially lower to boost prices. Why should the consumer have to pay for decisions of OPEC? If we commit to offtake, they should also supply no matter what," the official cited by PTI said, adding that in an ideal market, the pricing should be of the day when the loading is taking place. “That way we can get the advantage of any drop in international oil rates. But that is not the case. They (Saudi and other OPEC suppliers) insist on selling at their official selling price only," he said.