India, the world’s fifth-largest economy, will be able to “manage” oil prices at $100 a barrel, but the impact on other developing countries would be concerning, its Minister of Petroleum and Natural Gas Hardeep Singh Puri has said.
Mr Puri, who was speaking at the Adipec event on Tuesday, said that the price of $100 a barrel of oil was not in the interest of either the producing countries or the consumers.
“India is a large economy. It has a lot of domestic production. We'll cut back [or] we'll do something or the other, but I would worry about what happens to other parts of the developing world,” he said.
Prices will reach an “inflection point” where high inflation caused by stimulus packages and economic policies will result in “flat” growth and large parts of the world becoming “recessionary”, Mr Puri added.
Brent crude, the benchmark for two thirds of the world’s oil, has surged about 26 per cent since falling to a low of $71.84 in June as Opec+ supply cuts tighten crude supplies.
Opec+ members Saudi Arabia and Russia have announced supply reductions of 1.3 million barrels per day until the end of the year.
Opec+ has in place total production curbs of 3.66 million bpd, or about 3.7 per cent of global demand. This includes a 2 million bpd reduction agreed upon last year and voluntary cuts of 1.66 million bpd, announced in April and extended to December 2024.
The oil producers' group is meeting in Vienna on Wednesday to discuss the current market dynamics. It is widely expected to stick to its existing output policy.
Mr Puri also said that green hydrogen, produced using renewable energy, would succeed in India, given a large domestic market.
“You need to have a situation where there is demand, where there is production and there is consumption,” he said.
“We have a situation where the transitioning to green energy is taking place at a pace faster than what we had anticipated.”
As part of India’s green hydrogen plan, called the National Green Hydrogen Mission, the country aims to produce five million tonnes of green hydrogen annually by 2030, with the potential to reach 10 million tonnes as export markets grow.
The country, which is also one of the world’s largest crude oil importers, aims to produce 500 gigawatts of non-fossil fuel capacity by 2030 to meet half of its energy demand through renewables.
“Nothing has done more to accelerate the transition to green energy than higher high fuel prices,” Mr Puri said.
Adipec 2023 kicks off in Abu Dhabi
