The international crude oil market is adequately supplied and well balanced now, said Organization of the Petroleum Exporting Countries’ (OPEC) secretary general Mohammed Sanusi Barkindo on Tuesday.
The international crude oil market is adequately supplied and well balanced now, said Organization of the Petroleum Exporting Countries’ (OPEC) secretary general Mohammed Sanusi Barkindo on Tuesday, adding that it may be in a fragile state though.
“In 2019, there is a possibility of larger imbalance due to growth in supply,” he said while speaking at the India Energy Forum by CERAWEEK.
The comments from Barkindo comes a day after Prime Minister Narendra Modi raised the country’s pricing concerns before global oil suppliers and urged them to review payment terms in order to provide relief to a weakening rupee against the US dollar.
There is no shortage of supply globally at the moment and concerns of consumer countries such as India are being taken into account by the supplier group, Barkindo indicated. In the past one year, India’s crude oil import bill has gone up by 40% due to an increase in prices. A weak rupee has added to the woe.
Late in the day, petroleum minister Dharmendra Pradhan addressing the media said that while OPEC had promised an additional production of one million barrel per day in June, countries such as Russia and Saudi Arabia have only increased production and the rest are yet to comply. Modi has asked global leaders to look into the issues being faced by the consumer nations.
Experts at the India Energy Forum are of the view that the rise in prices globally is due to market sentiments despite it being physically balanced. According to Pradhan, various issues including US sanctions on Iran and a drop in production from Venezuela have led to a rise in international prices.
Barkindo added that India’s oil demand is expected to rise by 5.8 million barrels per day (bpd) by 2040, accounting for around 40% of the global demand rise. OPEC expects investments in the range of $11 trillion globally by 2040 to meet rising demand.
From around 14.5 million bpd in 2017, global oil demand is expected to increase to 111.7 million bpd by 2040, as per OPEC estimates. Urging the crude oil producing nations to raise the output, Barkindo added that global spare oil capacity is shrinking owing to current geopolitical situations. Barkindo pointed out current trade tensions and movement of interest rates and other international events affect demand projections.