Hardip Singh Puri, India's Minister of Petroleum, emphasized in statements that high oil prices are caused by disruptions in trade routes and not a real shortage of oil in the world. Speaking to reporters on the sidelines of an event, he said, “There is no shortage of oil supply in the world. Global production capacity is 104 million barrels per day, while oil consumption is 94 million barrels per day.”
Disruptions in Trade Routes and High Transportation Costs
Puri added that although there is sufficient oil supply, part of this supply does not easily reach consumers due to existing crises in the Middle East and disruptions in the Strait of Hormuz. He continued, “When the conflicts between Russia and Ukraine began, that was a problem. But the situation became more serious when the Strait of Hormuz was closed.”
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Transportation costs across all global maritime routes have risen sharply as trade routes have been disrupted, making journeys longer and reducing access to tanker fleets. India, in particular, has faced a significant increase in crude oil import costs since the onset of the Iran war. This war has had a direct impact on Middle Eastern oil supply, oil prices, and transportation rates.
Reducing Dependence on Oil Imports
The Minister of Petroleum of India announced that to reduce the country's 85% dependence on crude oil imports, India is seeking to strengthen domestic oil and gas exploration. This move aims to enhance energy security and address supply disruptions that lead to rising energy prices. As the third-largest crude oil importer in the world, India is striving to tackle these challenges.
While oil prices have risen due to existing supply disruptions, India hopes that by increasing domestic production, it can alleviate some of these issues and ensure the country's energy security. Given the global production capacity of 104 million barrels of oil per day, the Indian Minister of Petroleum emphasized the need for appropriate measures to manage these resources and improve trade conditions.
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