Due to the pandemic that has shut down some oil fields, India’s oil production fell 5% year-over-year during the fiscal year between April 2020 and March 2021, while the Refiners processed 13% less crude due to lower fuel demand, according to government data. Quoted by Economic times.
Natural gas production in India also fell, 8%, in the just-ended fiscal year, the data showed.
According to The data According to the Petroleum Planning and Analysis Unit (PPAC), India’s crude oil import volume decreased by 12.7% between April 2020 and March 2021 compared to the same period of the fiscal year previous. In terms of value, India spent US $ 61.9 billion on crude oil imports in April 2020-March 2021, compared to US $ 101.4 billion in 2019/2020.
While part of the decline in the import bill was due to lower import volumes, most of India’s drastic drop in crude spending was due to extremely low oil prices in the spring of 2020. At the time, India – and the other major importer in Asia, China – embarked on a buying frenzy to source crude at low prices.
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India used ultra-low crude oil prices last spring to supplement its strategic oil reserves with oil at $ 19 a barrel, saving nearly US $ 700 million in the process, India’s Ministry of Petroleum and Natural Gas said in September. The average cost at which India bought crude oil in April and May was $ 19 per barrel, compared to the $ 60 per barrel price in January 2020. Thanks to the cheapest oil for years at the start of the second quarter, l India saved $ 685.11 million. on its crude oil import bill, the ministry said.
As oil prices have rebounded in recent months, India – the world’s third largest importer of oil – has expressed frustration over OPEC + decisions to keep markets tight, calling on OPEC + to its “Artificial reductions to keep prices up”.
India’s sensitivity to high oil prices has led the government to ask Indian state refiners to aggressively diversify oil imports out of the Middle East and its oil kingpin in Saudi Arabia.
By Charles Kennedy for Oil chauffage
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