India’s energy demand is expected to grow from 691 million tonnes of oil equivalent (mtoe) in 2010 to 1,500 mtoe in 2030, based on GDP estimates, composition of the economy and demand growth from industry, buildings and transport sectors, in a business-as-usual scenario. That’s what a recent study by McKinsey suggested.
The same report has also projected India’s import of primary energy requirements to increase from 30 per cent in 2010 to 51 per cent in 2030, assuming efficiency gains and a dip in energy intensity from 0.56 kg of oil equivalent (koe) per dollar in 2010 to 0.47 koe per dollar in 2030.
In this context, what prime minister Narendra Modi said last week assumes great significance. Modi had said India must aim to reduce its dependence on imports for meeting its energy needs by 50 per cent over a decade and a half. The prime minister said India’s dependence on imports for 77 per cent of its energy requirement should decline 10 per cent by 2022 and 50 per cent by 2030. There was, however, no clarity on whether the prime minister had referred to crude oil import only or it included crude, natural gas and coal as well.
There are two different sets of data – both official – on India’s crude imports. The Union ministry of statistics and programme implementation’s figures suggest that India imported 189 million tonnes (mt) of crude oil in 2013-14 and its total consumption during that year was 222 mt, implying that India met 85 per cent of its demand through imports, an increase from 76 per cent in 2005-06, when India had imported 99 mt crude oil.
Interestingly, statistics from the Union ministry of petroleum and natural gas shows that India’s import dependence in the petroleum sector in 2013-14 stood at 77.6 per cent, slightly higher than 76 per cent in 2011-12.
India has already brought down import of crude from Nigeria by 38 per cent. This was despite the fact that India has recently replaced the US as Nigeria’s biggest oil market. India’s import of Nigerian crude tumbled to 5.2 million barrels in December, from 13.7 million barrels in October and 12.4 million barrels in November 2014.
Last month, India did not import oil from Iran either. This was the first time in a decade that India did not import oil from Iran. Mind you, India is Iran’s second-biggest buyer of oil annually after China. Significantly though, most analysts feel the landmark interim nuclear deal between Iran and permanent members of the UN security council apart from Germany and EU, which India described as a significant step, has the potential to once again increase Delhi’s oil imports from Tehran and make the payment process much easier.
Iran has the world’s fourth-largest proved oil and gas reserves. But since the imposition of US sanctions, Indian companies have been wary of importing oil from Iran. Till 2006, Iran was India’s second largest supplier of crude oil, but dropped to the number seven spot by 2013-14.
On the pricing front, oil prices rose more than 6 per cent after Saudi Arabia, the world’s biggest crude exporter, and its allies launched air strikes on rebel targets in Yemen. Yemen lies on one side of Bab el-Mandeb, the fourth-busiest shipping bottleneck in the world by volume, while neighbouring Saudi Arabia exports more crude than any other country.
In the US, crude inventories expanded by 8.2 million barrels to 466.7 million through March 20, the highest level, according to the weekly data compiled by EIA since August 1982, says an Emkay Commodity research.
“In march, crude have shown extreme movement in the prices. It rose more than 4 per cent initially on rising conflicts between Saudi Arabia and Yemen and later on the gains capped by Iran nuclear deal. Oil trimmed its biggest weekly advance in four years on speculation that conflicts between Yemen and Saudi Arabia will reduce ample crude supplies.
“Of late, crude oil futures plunged sharply after western powers negotiated a tentative nuclear deal with Tehran, which could add more crude to the already oversupplied market. WTI crude is unlikely to reach $51.80 levels unless situation in the West Asia worsens.
“Crude oil prices have been consolidating in a broad range of 3,438 to 2,643 levels since the past two months. Prices rallied to a high of 3,368 following the geo-political tensions but could not sustain at higher levels. Prices need to sustain above 3,200 levels for it to re-test 3,325/3,360 areas on the upside. Levels between 2,940 and 2,950 are the crucial support zones for prices and a correction towards 2,700 levels again,” said the Emkay Commodity research report.
Source:hellenicshippingnews.com
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