Changed oil market may help India extract better deals from suppliers
oil market has changed in a year and will influence the way India negotiates its annual crude purchase deals for next year as the country is witnessing fuel consumption growth while global demand is forecast to be weakening, a petroleum ministry official said.
“When we sit down with them (suppliers) in December or January, for both sides the negotiating positions would be very different from what they were last year,” said the official, who didn't want to be named. “The market of December 2024 is not the market of December 2023.”
“What has changed in the market is that whether it’s IEA or OPEC, they are bringing down their estimates for world demand,” he said, adding that India was in a different position as it is experiencing a demand increase.
Weak demand outlook and increased supplies from the US have influenced global oil prices, which have fallen a fifth in about five months.
Indian refiners may try to leverage the changed market conditions to extract better purchase terms from suppliers. While the purchase prices are set around benchmarks, which keep changing, several other terms are also rigorously negotiated such as the credit period, volumes, makeup cargoes and flexibility concerning ports, the official said.
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