The G20 Energy Ministers' focused on ways and means to ensure stable energy markets, which are affected due to demand reduction as result of the COVID-19 pandemic and the ongoing surplus production related matters.
Amid high volatility in international markets, India, world’s third largest oil consumer, on Friday pitched for a stable oil market that provides reasonable price for producers and affordable rate for consumers. Speaking at the extraordinary meeting of energy ministers of G20 nations, Oil Minister Dharmendra Pradhan asserted that India will remain the engine of world energy demand growth. “In terms of the ongoing energy market fluctuations, Minister stated that India has always advocated for a stable oil market, which is reasonable for producers and affordable for consumers,” an official statement said.
The G20 Energy Ministers’ focused on ways and means to ensure stable energy markets, which are affected due to demand reduction as result of the COVID-19 pandemic and the ongoing surplus production related matters.
Participating in the meeting through video link, Pradhan highlighted the decision to provide 80.3 million poor families free LPG cylinders, as part of a USD 23 billion relief package to deal with the fallout of COVID-19. He emphasized that India was and will continue to be the global energy demand centre.
The minister also underscored government’s efforts to fill in strategic reserves using low oil price regime.
Appreciating the collective efforts of OPEC and OPEC-plus countries to balance the supply-side factors which is imperative for long-term sustainability, he however urged that oil prices should be targeted to affordable levels to allow for a consumption-led demand recovery.
The G20 Energy Ministers’ meeting will be adopting a joint statement, which inter alia, proposes to establish a task force to advise the G20 Energy Ministers on the next steps, and agreed to remain engaged in the coming days. The G20 group of leading world economies had called an extraordinary energy ministers’ meeting to discuss OPEC-led plans for a global crude oil production cut accord aimed at shoring up prices that have in the last one month halved.
The meeting was held via webinar to “foster global dialogue and cooperation to ensure stable energy markets and enable a stronger global economy,” the G20 said in a statement. This is the first time the G20 has specifically convened to address energy issues, showing the depth of concern about the oil crash. It came amid OPEC, Russia and nine other allies holding marathon talks to finalise a deal to cut an unprecedented 10 million barrels a day of global output in a bid to resuscitate prices plummeted by the coronavirus pandemic.
The alliance, known as OPEC+, is also hoping to convince other key oil producers, including the US to participate in the deal. Saudi Arabia, OPEC’s largest producer and de facto leader, holds the G20’s rotating presidency for this year.
Global oil demand has fallen by more than a quarter as countries around the world instituted lockdowns that grounded flights, shut factories and took most vehicles off the road, in an effort to combat coronavirus.
This has led to a crash in prices that threatens to cripple the global industry. Brent crude hit an 18-year low of USD 20 late last month, before recovering to above USD 30 on hopes producers would reach a deal. US President Donald Trump has been pressing Saudi Arabia and Russia to pull back from a price war that began last month after they fell out over how to respond to the drop in demand.
Saudi Arabia and Russia, who had till then collaborated through the OPEC+ group, want other countries including the US — the world’s top oil producer — to also participate in cuts. In the run-up to the meeting, International Energy Agency (IEA) executive director Fatih Birol said the global supply glut is at least 25 million barrels per day.
The G20 group includes large oil producers such as the US, Canada, Saudi Arabia, Russia and Brazil as also large consumers such as China, India, Japan, and South Korea who rely on imports and see little incentive in raising prices as recession looms.