As US – Iran tensions continue to rise, India has expressed concerns about the soaring oil prices. US crude went up 10% this week and global benchmark, Brent increased by 5% amid fears of a US military retaliation on Iran, which would impact the Middle East.
The Indian Oil Minister Dharmendra Pradhan, on Friday, discussed with the Saudi Minister of Energy, Industry and Mineral Resources Khalid Al-Falih about the increased cooperation in the hydrocarbon sector.
In a tweet, Pradhan said he expressed concerns on the developments in the Strait of Hormuz leading to rising crude oil price. “Reiterated the sensitivity of Indian consumers to prevailing oil price volatility. Sought active role of Saudi Arabia within OPEC and OPEC Plus for keeping oil prices at reasonable levels.” Earlier in the week, Pradhan had spoken with another OPEC titan, the UAE who assured India that it would continue to supply oil despite disturbance in the Strait of Hormuz.
The oil price has been driven by US – Iran tensions. According to Middle East Monitor the hostility between the two countries has been on the rise since US sanctions on Iran severely reduced oil exports from OPEC’s third largest producer. “High oil prices have been a pervasive concern for India, who indeed is sensitive to oil price fluctuations due to its serious oil addiction that has long been fed by favorable pricing and credit terms from Iran for its oil purchases,” says Oil Price.
According to Petroleum Economist, India is heavily dependent on imports for meeting its domestic crude oil and natural gas needs. “It imported around 82% of its total oil demand in 2016-17, while liquified natural gas imports accounted for about 40% of total gas consumption.” India is the fourth largest LNG importer after Japan, Korea and China and has four terminals with a combined capacity of 27m tonnes a year; however, capacity is expected to rise by 2022 to 47.5m tonnes.