After gold, now India's growing importance in the global crude oil market

- In 2023, oil demand is likely to increase by two million barrels per day

- Crude prices are unlikely to rise above $100 per barrel this year

- 80 percent of India's demand is met by imports and Russia's share in it has now increased

India is now making its mark in the global market. After becoming a big player in the gold market, now India is making a name for itself in crude oil as well. Both the demand generated from India and the diplomatic policy here are expected to be important factors in the crude oil sector in the coming years.

Meanwhile, the crude oil picture is also murky amid the ongoing global uncertainty. There is a situation where the price increases one day and then decreases the next day.

It is to be noted that crude oil prices continued to fall last Friday, as the signs of recession in America are ringing, which has been asserting itself intermittently. In such a situation, the demand of crude oil is decreasing and due to this, the price is also decreasing. Out of stock, gasoline supplies are rising in the U.S. and demand is falling around the world. At the time of writing, Brent futures were up 0.26 percent to $86.31 per barrel. Similarly, the West Texas Intermediate crude contract rose to $82.37 per barrel. Both benchmarks were down more than two percent from their levels at the end of last month early Friday.

The warning given by the International Energy Agency is behind the sudden increase in crude oil. It warned that OPEC's announcement of a cut in crude production would lead to supply cuts and harm to consumers.

The agency's monthly report said that oil demand is likely to increase by 2 million barrels per day in 2023. Thus, the total daily demand will increase to 101.9 million barrels.

Notably, the Federal Reserve in America has continued to increase interest rates to curb the inflationary monster. It does not mind recession, but its clear stance is that inflation should not rise.

The dollar also strengthened on the prospect of an interest rate hike in the US, which would push up global crude oil prices and hurt demand.

As far as supply is concerned, crude oil loading from Russia to western ports is continuously increasing. It is expected to reach the highest level since 2019, i.e. more than 2.4 million barrels per day. Although Russia has talked about reducing production, trading and shipping, its policy is currently affecting crude prices globally.

On the other hand, consumption is increasing in China after the lifting of Covid-related restrictions. The Energy Agency has also said that jet fuel will account for 57 percent of the total demand in 2023.

It should be noted here that OPEC has expressed the possibility of reduction in demand. It has announced a cut of 1.16 million barrels per day.

As far as India is concerned, Russia has now emerged as India's largest exporter of crude oil. 80 percent of India's demand is met by imports and Russia's share has now increased.

Russia has adopted the attitude of continuously increasing exports to India, even though Western countries have kept a maximum price limit of 60 dollars per barrel. India's crude imports in February included crude worth $3.35 billion from Russia, $2.30 billion from Saudi Arabia and $2.03 billion from Iraq. From last April to February this year, the value of imports from Russia has increased to 27 billion dollars. This figure is second only to the $30 billion worth of imports from Iraq.

India is now importing more than the limit imposed for Russia. This purchase depends on several factors, including supply from alternative sources.

Western countries have expressed displeasure with India against importing crude from Russia, but India has taken a tough stand against it. Recently, Finance Minister Nirmala Sitharaman said that India is likely to continue buying even if the price of Russian crude exceeds the limit.

It has to be mentioned here that according to the report of Iqra, there was a noticeable decrease in the seaborne exports from Russia in the first week of April. As a result, only 2.89 million barrels were exported per day. At the end of 2021, this amount was 5 million barrels per day. This shows the reduction in production by Russia. Ultimately this factor will affect the supply in the market.

Finally, it should be noted that according to the International Energy Agency in its report, the demand for crude oil in the world will increase by an average of two million barrels per day this year. According to Goldman Sachs, crude oil prices are unlikely to rise above the $100 per barrel level this year. It has predicted a decline in demand across Europe and North America and an increase in China. Even in India after 2025, before the demand starts to decrease, there is a possibility that the demand will increase. From this it can be said that India has become an important nation as an importing country and especially as an importing country more than Russia.