Oil prices may rise, could hit economy, users: IEA – Times of India

PARIS: The International Energy Agency (IEA) on Tuesday said that oil prices are expected to increase from current levels of around $85 a barrel due to the recent decision by Opec+ to reduce production and warned that it could “put a burden” on the Indian economy and consumers.
The agency, which tracks energy markets in major economies, also said it was “legitimate” for India to import crude from Russia and export petrol and diesel to other countries, including Europe. “India is doing this in a transparent way. And India is profiting by importing crude at a lower, discounted price,” IEA executive director Fatih Birol said after meeting commerce and industry minister Piyush Goyal here.
India’s oil imports from Russia have soared to make the sanction-hit nation the second largest source of crude. During April-February 2022-23, export of petrol and diesel from India has also shot up almost 50% to $86. 2 billion, with shipments to several countries such as the Netherlands seeing a significant increase.
Birol said the restrictions that followed Russia’s attack on Ukraine last year have reduced export earnings for Moscow, especially from gas. “More and more countries are producing and exporting gas. In the next two-three years, there will be a flow of LNG coming to markets, which will put downward pressure on the prices and ease gas supply,” he said. The IEA chief, however, was critical of the decision of the Opec+ countries to slash production. “We have all the reasons to believe that there could be an upward pressure on the prices. At this juncture, when the global economy is still very fragile and many emerging countries are having difficulties with economic performance, I found this decision risky for the global economy.”
He cautioned the decision could push up India’s import bill as the country imports 85% of its crude requirement.

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