Saying that current oil prices were not supported by market fundamentals, Indian oil minister Dharmendra Pradhan on Thursday called for “responsible pricing, one that balances the interests of both the producer and consumer.” During a meeting with ambassadors from OPEC countries to India, Pradhan said that current oil prices were not only not supported by market fundamentals, but had also “gone beyond the threshold which can be sustained by the world,” according to a statement from the Indian oil ministry. OPEC countries accounted for about 83% of India’s total crude oil imports, and 98% of LPG imports during fiscal 2017-2018, running from April to March. Pradhan had expressed similar concerns during a conversation over the phone with Saudi Arabian energy minister Khalid al-Falih last month.
His concerns were echoed by Keisuke Sadamori, director for energy markets and security at the International Energy Agency, who said in Tokyo Thursday that the impact from the recent rise in oil prices would be felt more in emerging economies in Asia. “Various countries, including India and Indonesia, have cut or suspended fuel subsidies,” Sadamori said. “In other words, we are seeing the situation, where the rise in crude oil prices are more easily reflected in retail product prices in Asian importing countries.” He added: “In that sense, the current upward trend in prices is extremely difficult for Asian importers as well as emerging economies.” The IEA in its oil market report released last Wednesday projected a sharp slowdown in oil demand growth in China and India in the second quarter. It forecast that China’s oil demand would grow by 270,000 b/d year on year in the current quarter, down from 460,000 b/d in Q1.