After Modi raises India's pricing concerns, Opec says no oil supply worries

Opec Secretary-General Mohammed Sanusi Barkindo said India's crude oil demand was expected to rise by 5.8 million bpd by 2040, accounting for around 40% of the global demand rise by then

The Organization of the Petroleum Exporting Countries (Opec) has said the current market seems fine. 

This came a day after Prime Minister Narendra Modi raised India's pricing concerns before the cartel's representatives, asking them to review payment terms and provide some relief to a weaker rupee.

Addressing a CeraWeek event, Opec Secretary-General Mohammed Sanusi Barkindo said: "Our current view is that the market is adequately supplied and balanced, though fragile. In 2019, there is possibility of a larger imbalance, due to more growth in supply." 

He said the concerns of countries such as India were being taken into account by the group.

Because of rising crude oil prices, retail prices in India are touching new highs. The government recently cut the excise duty on both petrol and diesel, telling its three oil-marketing companies to absorb some of the loss on this account.

Later on Tuesday, Union Petroleum Minister Dharmendra Pradhan said there was no plan to control petrol and diesel prices. "The government has no business to interfere in the pricing mechanism of petroleum products. It has a role in deciding taxes only," he said.

The minister said Opec had earlier promised more output but only a few supplier-countries had done so. He added that various issues, including a drop in production from Venezuela, led to rise in international prices.

Barkindo said India’s crude oil demand was expected to rise by 5.8 million barrels a day by 2040,  accounting to around 40 per cent of the global demand rise by then.

 Opec expects investments of $11 trillion globally till 2040 to meet the rising demand. From around 14.5  million bpd in 2017, global oil demand is expected to rise to 111.7 mon bpd by 2040, based on Opec estimates. Asking the producing nations to produce more, Barkindo said spare capacity had been shrinking, due to geopolitical issues, trade tensions and the like.