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Home Energy Energy-General Felicity Bradstock

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK

Home Oil Prices Rig Count Energy Energy-General Oil Prices Crude Oil Heating Oil Gas Prices Natural Gas Coal Company News Interviews Alternative Energy Nuclear Power Solar Energy Hydroelectric Renewable Energy Geothermal Energy Wind Power Fuel Cells Tidal Energy Biofuels Environment Global Warming Oil Spills Geopolitics Africa Asia Europe Indonesia International Middle East North America South America Video Breaking News Premium Articles Community Trade Now My Account Latest Discussions Energy General Oil Stocks & Prices Other Energy Topics Trade Now Get Exclusive Intel All Prices OPEC Blends Canadian Blends U.S. Blends WTI Crude • 51 mins Sell Buy 63.15 +2.97 +4.94% Brent Crude • 10 mins Sell Buy 66.25 +2.58 +4.05% Natural Gas • 51 mins Sell Buy 2.618 -0.001 -0.04% Heating Oil • 51 mins Sell Buy 1.890 +0.076 +4.16% Gasoline • 51 mins 2.036 +0.060 +3.03% Louisiana Light • 2 days 62.15 +0.60 +0.97% Start Trading CFDs Over 2,200 Different Instruments Click Here for 150+ Global Oil Prices Louisiana Light • 2 days 62.15 +0.60 +0.97% Bonny Light • 2 days 62.56 +0.36 +0.58% Opec Basket • 2 days 61.87 +0.41 +0.67% Mars US • 23 hours 60.23 +0.48 +0.80% Gasoline • 51 mins 2.036 +0.060 +3.03% Click Here for 150+ Global Oil Prices

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Marine • 2 days 61.49 +0.57 +0.94% Murban • 2 days 62.17 +0.57 +0.93% Iran Heavy • 2 days 59.42 +0.52 +0.88% Basra Light • 2 days 63.49 +0.53 +0.84% Saharan Blend • 2 days 62.21 +0.51 +0.83% Bonny Light • 2 days 62.56 +0.36 +0.58% Start Trading CFDs Over 2,200 Different Instruments Click Here for 150+ Global Oil Prices Bonny Light • 2 days 62.56 +0.36 +0.58% Girassol • 2 days 62.74 +0.36 +0.58% Opec Basket • 2 days 61.87 +0.41 +0.67% Click Here for 150+ Global Oil Prices

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Canadian Crude Index • 2 days 49.16 +0.11 +0.22% Western Canadian Select • 16 hours 49.18 +0.48 +0.99% Canadian Condensate • 16 hours 59.18 +0.48 +0.82% Premium Synthetic • 16 hours 60.58 +0.48 +0.80% Sweet Crude • 16 hours 56.08 +0.48 +0.86% Peace Sour • 16 hours 55.68 +0.48 +0.87% Start Trading CFDs Over 2,200 Different Instruments Click Here for 150+ Global Oil Prices Peace Sour • 16 hours 55.68 +0.48 +0.87% Light Sour Blend • 16 hours 56.18 +0.48 +0.86% Syncrude Sweet Premium • 16 hours 59.53 +0.48 +0.81% Central Alberta • 16 hours 55.53 +0.48 +0.87% Click Here for 150+ Global Oil Prices

Start Trading CFDs Over 2,200 Different Instruments

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Louisiana Light • 2 days 62.15 +0.60 +0.97% Domestic Swt. @ Cushing • 17 hours 59.75 +3.00 +5.29% Giddings • 17 hours 53.50 +3.00 +5.94% ANS West Coast • 3 days 62.97 +0.22 +0.35% West Texas Sour • 17 hours 57.10 +2.97 +5.49% Eagle Ford • 17 hours 61.05 +2.97 +5.11% Start Trading CFDs Over 2,200 Different Instruments Click Here for 150+ Global Oil Prices Eagle Ford • 17 hours 61.05 +2.97 +5.11% Oklahoma Sweet • 17 hours 59.75 +3.00 +5.29% Kansas Common • 2 days 50.50 +0.50 +1.00% Buena Vista • 2 days 62.47 -3.57 -5.41% Click Here for 150+ Global Oil Prices

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Home Energy Energy-General Felicity Bradstock

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.

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Share Facebook Twitter Linkedin Reddit Premium Content India’s Oil Demand Recovery Threatened By New Restrictions By Felicity Bradstock – Apr 14, 2021, 5:00 PM CDT Join Our Community As the summer months draw nearer, usually meaning a rise in oil demand for India, increased pandemic restrictions threaten this trend in the world’s third-largest oil importer.

According to a Bloomberg article , fuel consumption in India remains lower than it was before the pandemic, with oil demand in 2020 dropping to its lowest level since 2007. As Mumbai and the larger Maharashtra state enforce another round of restrictions, including a city-wide curfew during weekends, the reduction in traffic suggests a likely dip in the demand for fuel in the coming weeks.

Diesel consumption, used for trucks, farms, and factories across the country, accounts for 40 percent of India’s oil product sales. In March, diesel consumption was down 3 percent from 2019 levels and could drop significantly further if restrictions continue. The industry consultant FGE believes diesel demand will average 1.72 million bpd in the first six months of 2021, and could then drop to 1.71 million bpd later in the year.

Just a few weeks ago, experts were hopeful for a demand recovery in India as the sector seemed to be stabilizing. However, new restrictions and the unknown nature of a ‘second wave’ of Covid-19 infections will likely threaten this recovery prediction in the short term. 

Since greater restrictions have been introduced in cities across India, unemployment has already begun to rise, up 6.7 percent for the week ending April 11 compared to two weeks earlier. From media coverage, it appears as though many are rushing away from the city to smaller towns and villages as they worry about a repeat of last year’s restrictions where many were trapped without transport having lost their job and income. 

While many are hopeful for India’s future impact on the oil industry, as its population continues to grow, 2020 was a difficult year for the huge Asian country. Demand for petroleum products, including diesel, gasoline, and jet fuel, fell 10.8 percent between 2019 and 2020; the first annual decrease in 20 years.

Yet, India climbed to become the largest purchaser of U.S. crude oil in the first quarter of 2021, after being the second-largest buyer in 2020 at a rate of around 287,000 bpd , roughly 26 percent more than in 2019.

India’s preference for U.S. oil is due to the government’s inability to sway Saudi Arabia’s decision to limit production. Saudi Arabia kept its agreement with OPEC+ to curb production levels until oil prices stabilized, before gradually ramping up production over the coming months.

Related Video: Iran’s Oil Exports Render Sanctions Irrelevant

The Indian government has therefore been looking to diversify its oil imports to regional players. For example, India is expected to resume buying crude oil from Iran as soon as U.S. sanctions are lifted, after stopping its purchase of Iranian oil in mid-2019. 

Indian refiners are thought to have already begun preparatory work to enter into contracts with Iran as soon as possible. An Indian official stated , “We already have a template for commercial terms and we can very quickly enter into contracts the moment Iran is cleared for exporting oil”. 

Diversifying its imports to regional players and the U.S. will help to reduce its reliance on Middle Eastern oil giants Saudi Arabia and the UAE. This will allow India to obtain more competitive prices and better manage its energy security. 

While in the short-term increased restrictions look set to hinder India’s anticipated oil demand increase, mechanisms are in place to ensure that the country can diversify its oil imports to meet its oil needs as soon as restrictions ease.

By Felicity Bradstock for Oilprice.com

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