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The Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC) Haitham Al-Ghais announced, on Wednesday, that the organization is expected to secure a larger share of India’s oil imports in the coming decades due to its proximity.
This comes after OPEC’s recent diminished dominance, attributed to competition from discounted Russian oil.
According to data, OPEC’s share of India’s oil imports dropped from about 65% in 2022 to 50% last year, following Moscow’s increase in crude supplies to India and other Asian countries after it invaded Ukraine.
Al-Ghais stated that OPEC members and other producers must adapt to shifting market dynamics since early 2022 due to “redirected” trade flows, with increased Russian oil supplies to India and elsewhere in Asia.
“The producers from the Middle East remain ideal suppliers to the Indian market due to their proximity. It is a perfect match between suppliers and consumers, cost-effective for all parties,” Al-Ghais said, suggesting a larger role for OPEC members in India beyond just oil.
Industry sources revealed that OPEC supplied India with 54% of its oil imports in January.
“We expect levels to rise further in the coming decades as economic development continues in India,” Al-Ghais added, noting that “many” national oil companies in OPEC member states plan to invest in India’s refining sector.
India aims to increase its refining capacity to nine million barrels per day by 2030, up from the current 5.02 million barrels per day.
The International Energy Agency expects India, the world’s third-largest importer and consumer of oil, to become the largest driver of oil demand growth globally by 2030. OPEC anticipates Indian demand to more than double by 2045, reaching 11.7 million barrels per day.
