Oil’s rally to $70 a barrel is threatening to clip India’s economic wings at a time when Saudi Arabia is looking to join a $30 billion refinery project in the world’s fastest growing market.
The South Asian nation wants to see prices at about $50 a barrel in order to manage its finances better, Oil Minister Dharmendra Pradhan said in an interview. Meanwhile, Saudi Arabia — which is said to be aiming for oil near $80 to pay for its own crowded policy agenda — is planning to sign a deal to participate in a refinery on India’s west coast as part of its strategy to secure sources of consumption for its crude.
While Indian Prime Minister Narendra Modi’s administration reaped the benefits of the biggest price crash in a generation during its first term in power, oil is recovering as the government gears up for elections in 2019. Saudi Arabia, the world’s biggest crude exporter, is preparing for an initial public offering of its state-run producer and leading efforts by OPEC to curb output and eliminate a global glut that spurred oil’s decline.
“We are a very price-sensitive consumer,’’ Pradhan said on Tuesday. “From Indian consumers’ point of view, I will be more than happy if the price is around $50 a barrel.’’ Saudi Arabian Oil Co., known as Saudi Aramco, has agreed in principle to join a proposed 1.2 million barrel a day refiner on India’s west coast, he added. Read More