The decision by the Organization of the Petroleum Exporting Countries’ (Opec) to cut crude oil production by 1.2 million barrels per day (mbpd) is unlikely to have an impact on India’s crude oil subsidy figures, say experts. One of the largest importers of crude in the world, India has benefited highly from the low price regime. An Opec output cut might raise prices and, therefore, subsidies, is the worry. However, experts say, a global crude oil price of $50-55 a barrel is comfortable for India. It is believed that prices are unlikely to climb above this. With the International Energy Agency’s latest forecast for global oil demand and non-Opec supply, reduction of the exporter cartel’s output to 32.5 mbpd implies that 2017 demand will surpass supply by 0.8 mbpd. US production has dropped to 8.7 mbpd currently, against a peak of 9.4 mbpd, expected to improve in a higher price regime.

(Business Standard)