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The supply-side administration of the oil market from OPEC+ in latest months might result in demand destruction as fragile economies might not have the ability to bear with excessive oil costs for much longer, Hardeep Singh Puri, the oil minister of the world’s third-largest crude oil importer, India, has instructed Argus in an interview.
It is the appropriate of the OPEC+ producers to resolve how a lot oil they might pump, however they shouldn’t be “unmindful of the consequences,” the minister mentioned.
“And it can become a self-fulfilling prophecy, that the demand will drop because people don’t have the capacity to sustain it,” Puri added.
The feedback got here simply as Saudi Arabia and Russia, the important thing OPEC+ companions, mentioned this week they might be keeping their oil supply cuts in November and December.
Hours earlier than a daily OPEC+ panel assembly, Saudi Arabia mentioned early on Wednesday it could proceed chopping an additional 1 million barrels per day (bpd) from its crude oil manufacturing in November and December, and Russia mentioned in a separate assertion it could proceed to cut back oil exports by 300,000 bpd till the tip of the yr. Both provide ranges may very well be revised subsequent month.
In feedback posted on Twitter on Thursday, the Indian minister mentioned that “Cumulatively, OPEC & OPEC+ have reduced the availability of oil by 4.96 mb/d, comprising 5% of global oil demand, from the market since 2022, spiking brent prices from $72/bbl in June to $97/bbl in September 2023.”
“These measures have unintended consequences,” he mentioned.
“I think there is something called a reasonable level with which people can live,” Puri mentioned.
This is just not the primary time that the Indian oil minister has referred to as for “reasonable” oil costs.
Earlier this week, Puri urged OPEC “to imbue a sense of pragmatism, balance, and affordability in the oil markets” throughout a gathering with OPEC Secretary General Haitham Al Ghais on the sidelines of the ADIPEC vitality convention in Abu Dhabi.
The minister “urged OPEC to recognize the gravity of the current economic situation and urged the Secretary General to use his office to imbue a sense of pragmatism, balance and affordability in the oil markets.”
By Charles Kennedy for Oilprice.com
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