Hardeep Puri resets Saudi ties in hope of 'affordable' oil prices

NEW DELHI: A day after Riyadh and Abu Dhabi reached a broad deal to unlock more oil, India's new petroleum minister Hardeep Singh Puri on Thursday dialled his Saudi Arabian counterpart Abdulaziz bin Salman to offer India’s co-operation in keeping prices affordable.


Puri’s outreach with Salman resets New Delhi's energy ties with the OPEC lynchpin and raises hopes of lower fuel prices. It also puts India's energy ties with West Asian members of OPEC on an even keel, coming a day after a similar interaction with

UAE

’s

Sultan Ahmad Jaber

.

“Saudi Arabia is a central player in international energy market. I conveyed my desire to work with His Royal Highness Prince Abdulaziz to bring greater predictability and calm in the global oil markets, and also to see hydrocarbons become more affordable,”

Puri

tweeted late Thursday evening.

“Highlighted the crucial role of Saudi Arabia in rapidly growing energy needs of India in the coming years, and my strong desire to work with His Royal Highness to further diversify our bilateral strategic energy partnership beyond buyer-seller to see greater two-way investments,” Puri said.

Puri’s reconciliatory tone is in contrast to the muscular approach of predecessor Dharmendra Pradhan, who leveraged India’s market size as the world’s third-largest oil importer to single-handedly take on the grouping and Saudi Arabia, its de-facto leader, over price and volatility. This had recently strained relations with Riyadh.

Indeed, since his interaction with Qatar’s Saad Sherida Al-Kaabi last week, Puri, a former diplomat, has been measured in conveying New Delhi's concerns over the recessionary impact of high oil prices on economic recovery and demand, which will ultimately hurt producers.

The outreach is expected to lead to improved Saudi supplies and, perhaps, better deals. Saudi oil shipments to India fell recently after the oil ministry asked refiners to look elsewhere in retaliation to Riyadh pushing OPEC-plus to extend the output cut deal into 2021. It will also add wind to proposed Saudi investments in India.

The oil market reacted favourably to the Saudi-UAE deal, with benchmark Brent marginally declining to $74.26 on hopes of additional barrels. A truce between New Delhi and Riyadh, representing the interest of buyers and sellers, respectively, will further help calm the market. That will mean lower fuel prices, or at least long pauses between upward revisions.

OPEC accounts for 70-80% of India’s oil imports. The grouping’s West Asian members enjoy an unparalleled advantage of geographical proximity, which makes them the most viable source of oil for India. Saudi Arabia has an added advantage of an unmatched spare production capacity, which had allowed it to fill the supply gap when India stopped buying Iranian crude due to US sanctions.

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