The International Energy Agency (IEA) called OPEC+’s move to limit oil production “risky for the global economy”, saying it could push up already high prices, resulting in greater import costs for countries like India.
In response to an inquiry on the potential impact of Saudi Arabia’s reduction in oil production on countries such as India, Fatih Birol, Executive Director of the International Energy Agency (IEA), responded, “Such a move could raise India’s oil import bill, putting a strain on the Indian economy and consumers.” According to Birol , global oil markets are already set to tighten in the second half of 2023, with the possibility of a significant supply shortage emerging.
ALSO READ: Oil prices jump nearly 6% after OPEC+ output cuts
Speaking about the impact of rising prices in India, he added that “higher oil prices will not only contribute to inflationary pressure on other commodities, but will also result in a higher import bill for nations like India, which rely on overseas supply to meet their needs.”
According to Birol, India’s economy is healthy and will continue to be strong.
India ranks as the world’s third-largest consumer and importer of oil. It gets 85 percent of the oil it needs from other countries. During the first eleven months of its fiscal year 2022–2023, it spent USD 118 billion on oil imports.
Fatih Birol acknowledged that India is a significant country that imports crude oil and re-exports refined oil to Europe. The IEA head stated that India was acting transparently and in accordance with international rules and regulations. India is one of the countries that took advantage of the opportunity to purchase discounted oil in order to reduce its import cost.
ALSO READ: Despite half a million job cuts in last 6 months, here’s why blue collar jobs continue to be on rise