Live
- Resolve issue of pending postings of 23 UPSC-selected docs: LG
- NACS invites applications for cyber security courses
- Madhav returns to BJP as J&K poll in-charge
- JNTUH to roll out UG courses for working professionals
- Tughlakabad-Aerocity corridor: DMRC completes 865m underground tunnel
- Indian doc held in US for multiple sex crimes
- Meet held on issues ailing unorganised sector in India
- Films a priority, want to quit Ministry: Gopi
- TSCPCR directs Peddapally DC to inquire into minor girl’s sexual abuse
- Bharat Bandh: Mob tries to burn school bus with children on board
Just In
RIL-Aramco deal will make Saudi king of oil in India
![](/images/authorplaceholder.jpg)
![RIL-Aramco deal will make Saudi king of oil in India RIL-Aramco deal will make Saudi king of oil in India](https://assets.thehansindia.com/h-upload/feeds/2019/08/15/206169-reliance.jpg)
It will reclaim top slot from Iraq; Reliance will get assured crude oil supplies
Aramco's plan to buy 20 per cent of the oil-to-chemicals business of Reliance - which includes the world's biggest refining complex at Jamnagar on India's west coast - comes with an assurance to buy half a million barrels a day of the kingdom's crude on a long-term basis.
That's around 25 million tons a year and will allow Saudi Arabia to easily reclaim the top supplier spot from Iraq.
Asia has traditionally bought the bulk of its oil from the Middle East, but that's changing as the US ramps up shale exports, Russia looks for new customers and Saudi Arabia leads OPEC efforts to curb production to prop up prices.
American sanctions on Iran and Venezuela are also taking barrels off the market and providing an opening for new suppliers.
"The deal definitely gives Aramco access in a market where they are facing competition from other producers," said Sushant Gupta, Director of Refining and Chemicals for Asia Pacific at energy consultancy Wood Mackenzie Ltd. in Singapore.
"Incremental demand in Asia is being met more by other suppliers, particularly the US" India imports about 85 per cent of its crude requirements and the International Energy Agency forecasts it will be the world's fastest growing oil consumer through 2040.
The nation's oil consumption will grow from less than 5 million barrels a day at present to 8.2 million by 2035, according to Wood Mackenzie.
In the shorter term, growth in Indian consumption will offset a slowdown elsewhere. The International Energy Agency last week trimmed global forecasts for oil-demand growth this year and next and warned it might cut estimates further due to the US-China trade war. Indian demand-growth will rise to 225,000 barrels a day in 2020, from 170,000 this year, it said.
The tie-up will give the kingdom access to "what is widely expected to be the fastest growing refined oil product market over the next 20 years," Sanford C. Bernstein analysts including Neil Beveridge said in an Aug. 12. Note.
"For Reliance, it provides cash to fund expansion of their digital business and further expansion of downstream capacity with an experienced partner."
The US, which allowed global oil exports from the first time in 2015, shipped 6.4 million tons of oil to India in the financial year ending March 2019, making it the ninth-largest supplier.
American oil will likely account for 8 per cent to 9 per cent of Asian imports in five years, said Wood Mackenzie's Gupta. Russian exports to India jumped fivefold to 3 million tons in the year ending March 2018 after Rosneft PJSC and partners including Trafigura Group acquired a 400,000-barrel-a-day refinery near the Jamnagar plant.
Shipments declined to 2.2 million tons last year. Iran was India's third-biggest supplier in the last financial year, exporting around 24 million tons. (Bloomberg)
![](/images/logo.png)
© 2024 Hyderabad Media House Limited/The Hans India. All rights reserved. Powered by hocalwire.com