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According to a report from Oil Now on May 4, India has added more than 300,000 new cases of new coronary pneumonia every day in the past two weeks.
The increasingly severe epidemic crisis may cause the prospects for oil consumption to deteriorate in the short term.
However, in the long run, there may be a rebound later this year.
Malhotra, Director-General of the Federation of Indian Petroleum Industries (FIPI) said: "From the current situation, it may take several months for the epidemic in India to stabilize.
As the regional blockade restricts many activities, the oil market in the second quarter cannot be accommodated.
Indian Prime Minister Narendra Modi (Narendra Modi) urged state leaders to focus on the quarantine zone and use regional blockades as a last resort.
Fearing that the epidemic might get worse, many provinces plan to implement lockdown measures.
As India has been hit by a record number of new crown pneumonia cases, India’s oil demand in 2021 will increase by 400,000 barrels per day year-on-year, which is lower than the previous growth forecast of 440,000 barrels per day.
This number may be lowered by another 20,000 barrels per day, but further reductions will depend on the development of the situation in the next few weeks.
Analyst Chris Midgley believes, “With the recovery of global industrial activity, India will continue to benefit from a strong world economy.
Oil demand may slow in the short term, but there are sufficient conditions to make us believe that in the second half of 2021, There will be a strong recovery in oil consumption.
As the world’s third-largest crude oil consumer and importer, as part of a long-term agreement with the Guyana government, India expressed interest in buying Guyana’s Liza crude oil, and cooperated with relevant departments and commercial entities to reach an agreement that is conducive to the import and export of crude oil.
It is understood that Guyana has not yet made a definitive decision on exporting crude oil to India.
India’s Minister of Natural Resources, Vickram Bharrat, stated that the government’s main goal is to sell its share of crude oil at market prices, thereby enabling it Maximize returns.
This South American country will become a major oil producer in Latin America, and its output will exceed 1 million barrels per day by 2027.
It is worth mentioning that India’s oil and gas demand is expected to increase nearly three times, from 229 million tons in 2018 to 607 million tons in 2040.
Wang Jiajing excerpted and translated from Oil Now
The original text is as follows:
India's pandemic crisis won't kill long-term oil demand, Liza Crude still on country's radar
India has witnessed more than 300,000 new coronavirus cases per day for nearly two weeks in what is a growing humanitarian crisis that could see the outlook for oil consumption worsening in the short term, before rebounding later this year.
“Looking at the situation now, it could take a couple of months to stabilize,” Malhotra said.
This quarter will be not so good for oil as regional lockdowns have restricted many activities.
And there is more to come.
Indian Prime Minister Narendra Modi has urged leaders of the various states to focus on micro containment zones and use lockdowns only as a last resort.
But many provinces are planning to implement regional lockdowns amid fears the situation could get worse.
Analytics has said that India would witness a year-on-year oil demand growth of 400,000 b/d in 2021, revised down from an earlier growth estimate of 440,000 b/d, as the country grapples with record COVID-19 cases.
Chris Midgley,, said last week that those numbers could possibly be revised down by another 20,000 b/d, but any further revision would depend on how the situation develops over the next few weeks.
But Midgley added that India would continue to reap the benefits of a robust world economy as industrial activity picks up across the globe.
Oil demand could slow in the near term but there were enough conditions to believe that consumption would stage a robust recovery in the second half of 2021.
The world's third-largest crude consumer and importer has expressed interest in buying Guyana's Liza Crude as part of a long-term deal with the Guyanese government.
The country is interested in working with authorities as well as commercial entities to forge an agreement that would facilitate these exports.
OilNOW understands that no firm decision has yet been made by the Guyana government on crude exports to India.
Natural Resources Minister, Vickram Bharrat, has told OilNOW the government's primary objective is to sell its share of crude at market price where it will be able to maximise returns for the country.
The South American country is positioned to become a major oil producer in the Latin America region with output set to surpass the 1 million barrels per day mark by 2027.
India's oil & gas demand is expected to increase nearly 3-fold from 229 million metric tons in 2018 to 607 million metric tons in 2040.