International oil costs rose after OPEC+ and its partners overlooked India’s request to ease production control, with Saudi Arabia asking New Delhi to rather utilize oil it purchased at absolute bottom rates a year ago.
Brent crude futures, the international benchmark at oil costs, rose $2.62, or 3.9% on Friday, to settle at $69.36 a barrel, its highest level since January 2020.
A stronger-than-expected US jobs report and a decision by OPEC and its partners not to build supply in April pushed oil costs to their highest level in over a year.
India’s Oil Minister Dharmendra Pradhan had in the approached Thursday’s OPEC meeting encouraged the makers’ group to ease production curbs to satisfy their guarantee of stable oil costs. He felt rising international oil costs were harming economic recovery and demand, said a PTI report.
Reacting to an inquiry on India’s requests, Saudi energy serve Prince Abdulaziz receptacle Salman at a press conference after the OPEC+ decision on Thursday said New Delhi should remove some of the crude out of storage that they had bought at exceptionally modest rates a year ago.
“With regard to India, very simple. I would ask my friend that he withdraw some of the cheap oil that they bought in April, May and June (last year),” the Saudi Minister said.
“There is an opportunity cost for not withdrawing it now.” India had purchased 16.71 million barrels of crude in April-May, 2020 and filled all the three Strategic Petroleum Reserves created at Visakhapatnam in Andhra Pradesh and Mangalore and Padur in Karnataka. The average cost of that crude purchase was $19 per barrel, according to Pradhan’s written reply to a question in the Rajya Sabha on 21 September 2020.
Petroleum and diesel rates in India are at present at all-time highs. These rates are modified consistently by oil marketing organizations in accordance with changes in the international costs and the rupee’s exchange rate. Oil costs have been on an ascent since January on optimism in the global economy in expects improving fuel demand as vaccines are carried out.