Sources privy to the development said that with oil market globally turning into a buyer’s market amid oversupplies and Covid-19 related demand destruction, India sees no point in immediately seeking exemption from sanctions but would rather wait for an opportune time to make its case.
As a big importer of oil, India wants to have a diversified market for crude and in this if traditional market like Iran and Venezuela is revived, it would only be for good. But the Covid-19 related disruptions have affected oil demand globally and producers are saddled with inventories that they are willing to liquidate at attractive pricing. This has converted oil from sellers’ to a buyers’ markets giving ample ammunition to oil importers to get requisite quantities on time at very attractive pricing.
Iran was India’s second largest oil supplier till sanctions by the West over Islamic country’s alleged nuclear programme cut oil supplies.
India stopped crude oil supplies from Iran altogether from May 2019 following re-imposition of US sanctions.
Venezuela, on the other hand, was the fourth largest crude supplier to India before US sanctions in January 2019 on the state-run companies there reduced their oil exports.
For India, a wider crude oil import basket works to its advantage at its protection against supply disruptions in one of the countries. It also helps on getting better supply deals.
India imports 85 per cent of its oil needs and its dependence on oil expected to remain firm for at least next couple of decades. Energy consumption here is expected to grow by 3 per cent annually till 2040, much higher than any other energy guzzling country.
