India urges oil producers to boost supplies as high prices bite

Indian petroleum minister Hardeep Singh Puri has urged global oil producers to boost global supplies of crude oil as consumption is taking place at a faster pace, squeezing cargo availability, putting upward pressure on prices and threatening to derail the demand recovery.

The comments from one of Asia's leading oil importers come after OPEC and its allies decided earlier this week to increase output by 400,000 b/d for March. However, an S&P Global Platts survey of analysts said that the volumes may not ease tight supplies and overheated prices.

"We have a situation where the amount of crude made available in the market is less than the demand. That is why prices are high. We are in touch with the producing countries and we try to use our margin of persuasion to tell them to make more crude available," Puri told the parliament.

Crude oil futures were higher during mid-afternoon Asian trade Feb. 4 as freezing temperatures in the US and ongoing geopolitical tensions between the US and Russia over Ukraine exacerbated supply concerns.

Oil prices have hit seven-year highs. Crude oil futures were higher in mid afternoon Asian trade Feb. 4 as freezing temperatures in the US and ongoing geopolitical tensions between the US and Russia over Ukraine exacerbated supply concerns.

At 2:26 pm Singapore time (0626 GMT), the ICE April Brent futures contract was up 29 cents/b (0.32%) from the previous close at $91.40/b, while the NYMEX March light sweet crude contract was 44 cents/b (0.49%) higher at $90.71/b.

Asian oil demand is expected to grow by 1.5 million b/d year on year in 2022, up from 1.2 million b/d in 2021, with the region depending heavily on crude imports, Platts Analytics said.

Energy transition focus

Separately, Puri told the World Energy Policy Summit 2022 held in New Delhi that India would emerge as a global leader for sustainable energy transition for cleaner and green energy, highlighting the county's commitment to turn net carbon zero by 2070.

He said India was undertaking reforms in the hydrocarbon sector keeping in mind the changing energy landscape. "These are the outcomes of well-considered long term strategy to tap our immense resources."

India has taken steps to overhaul the hydrocarbon policy framework to ensure energy security while pursuing a green path to progress, the minister said.

Puri said India was exploring alternative energy sources for clean fuels in natural gas, ethanol, and green hydrogen. He reiterated India's commitment to become a global hub for green hydrogen in the near future. India's growth has the potential to capitalize on global economic resurgence, the minister said.

"Any achievement by India will have a multiplier impact on the global achievement of sustainable development goals," Puri said. The minister said India's need would also shape the global energy market.

According to the BP Energy Outlook, India's share in global energy demand is expected to double to 12% by 2050 from the current level of 6%, accounting for over a net quarter of global primary energy demand.

State firms embrace change

State-run refiner Indian Oil Corp's Chairman Shrikant Madhav Vaidya told the virtual summit that the company was pursuing the government's agenda of energy transition. It sees natural gas as a "transition fuel" that can significantly curb air pollutants and greenhouse gas emissions.

Vaidya said hydrogen and carbon capture, utilization and storage are the two critical priority research areas for the state refiner.

"We are expanding our research activities in sunrise areas -- alternative energy segments like bioenergy, solar energy, hydrogen economy, energy storage, nano-technology, carbon capture and utilization and battery technologies," Vaidya said.

State-run upstream company Oil and Natural Gas Corp is also exploring opportunities beyond hydrocarbons. It is looking at expanding its footprint in the renewables space, such as geothermal, solar, offshore wind, and hydrogen, Alka Mittal, chairman and managing director, told the summit.

ONGC has undertaken the country's maiden geothermal field development project, while it is also working along with IOC on a carbon storage project, she added.

Gas can play a significant role in realizing the country's goal of the net-zero, said Manoj Jain, chairman and managing director of gas utility major Gas Authority of India Ltd.

Gurdeep Singh, chairman of state-run power generation company NTPC told the summit that as the energy transition process gains speed, a big challenge would be to ensure electricity to the county's 1.3 billion people at an affordable price, as well as making the electricity generation more environment-friendly.