Oil imports from Russia and the US to India have risen, while purchases from the Middle East have declined. This growth momentum is expected to continue, not just in the next quarter but in the coming years. India’s growth story will drive increasing demand across all fuels - electricity, oil, and gas. The new coalition government is likely to continue the reform process, which includes a strong push for sustainable development and clean energy initiatives, such as EVs, to balance out demand. But given India’s growing population and high economic growth rates, along with ongoing industrial activities, the demand for energy, particularly in transportation, is expected to remain high.
Has the opportunity of discounted Russian oil faded?
The discounted rates have diminished significantly. Initially, they were as high as $12-13 per barrel, and they have decreased to about $3-4. But given India’s growing oil demand, the country is actively seeking to secure supplies from varied sources. Its priority is meeting its energy needs rather than asking industries to curtail their operations.
Outlook for demand in the rest of Asia in H2?
Growth has been primarily driven by China and India, which continue to expand. However, other economies in the region, such as Pakistan and Bangladesh, which rely heavily on oil and gas for their energy needs, are experiencing subdued demand due to weaker economic conditions.
Why are we not seeing higher oil prices given Q3 demand?
I think exporting nations are aware that excessive price increases could drive countries to invest rapidly in cheaper alternative energy sources, potentially leading to a sharp decline in oil demand. These countries will want to be cautious about keeping prices at a level that maintains demand while avoiding a swift transition away from oil, as technology evolves and alternatives like green hydrogen for heavy-duty vehicles become more viable. They are carefully balancing to ensure they stay relevant during this transitional phase.