Policy
The Threat Of Demand Dropping Takes Crude Prices Down
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India’s Consistently Rising Dependence On Imported Crude Oil
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India To Step Up E&P Activities At Deliberate Speed
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Charging Network Hampers Ambitious Plans For EV Adoption
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Refineries Perform Well, Production, Consumption Up
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Regulation
Prices Of Politically Sensitive Diesel, Petrol Land OMCs In Trouble
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What Triggered The Fall In Petroleum Products Export In June 22?
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AG&P’s Terminal To Raise India’s LNG Regassification Capacity
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One More Component Of LPG Subsidy To Go
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Alternative Energy / Fuel
Ethanol Blending With Petrol Program, Alternate Fuel Infrastructure Make Progress
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New Projects
Shelf Drilling Bags Offshore Rig Contract
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EIL Secures Order Worth Rs. 1540 Mn In Q1 FY 2022-23
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IOC Ready To Commission Its Aviation Fuel Station At Belagavi Airport
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Market Watch
India Revises Commitment To Reduce Emissions Intensity Of Its GDP By 45% By 2030
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LPG: 21 Million Customers Did Not Buy A Single Refill In FY ‘22
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Companies
DEEP.KBB GmbH
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Aban Offshore Receives LoA For Jack-Up Rig ABAN III From ONGC
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ONGC Awards Contract To Jindal Drilling And Industries Ltd
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SEAMEC II Vessel To Continue Deployment With ONGC
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MRPL To Expand Petrol Pump Network In Tamil Nadu, AP, Telangana
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Press Release [FREE Access]
Petro Intelligence » Oil – The Latest WMD Deployed In The Ukrainian Conflict

By Surya P Sethi*

Dr. Surya P SethiThis piece is not an attempt to take sides or question the morality of country positions on the Ukrainian conflict. It is simply a cry for attention by the author from a lower middle-income country, speaking for all companion countries in the bottom half of the World, to highlight their suffering and immense collateral damage from a war, not of their making!

By now it is clear, even to the most casual observer, that the Ukrainian conflict that completed its first 100 days on June 3, 2022 is a war with global repercussions way beyond the current battle fields in Eastern and Southern Ukraine. Only some very serious geopolitical risks and imminent threat to the prevailing world order could have prompted the 99 years old Henry Kissinger to remind world leaders, gathered at Davos last week, the role of Russia in a stable Europe and the need for a neutral Ukraine as a bridge between Russia and the Eastern flank of NATO. Kissinger minced no words in forecasting a new alliance building up for another cold war if the war in Ukraine does not end quickly with a negotiated settlement within the historical context he outlined.

The use of the US Dollar, the world’s dominant reserve currency, and the prevailing western controlled financial system; have been described as “weapons of financial destruction” even by the mild-mannered Canadian Broadcasting Service News; while predicting dire long-term consequences for the global economy. And if that is not enough one has to only listen to Jefferey Sachs’speech at the UN to gain a perspective on the food crisis that the Ukrainian conflict is unleashing on the World’s Poor. Even Henry Kissinger alluded to the food crisis and other disruptions in his address at Davos.

And amidst all this, it has been most heartening, as an Indian, to see India enunciate its clear stand demanding an immediate end to the war in Ukraine through dialogue. No one could have stated the ground realities of the current world order and India’s stand more succinctly than Foreign Minister Jaishankar in his recent interview at the Bratislava Forum.

As in Bratislava, off late, India has been reprimanded in all global fora for not joining the Western alliance and for her oil imports from Russia. And this brings me to the latest Weapon of Mass Destruction unleashed on the global poor; already battling food and supply chain shortages and consequent rise in prices of basic lifeline goods and services. It is the sixth stage of Sanctions against Russia that seek to reduce the West’s oil dependence on Russia to 10% of the levels prevailing before the Russian invasion of Ukraine. In addition to replacing Russian imports, the measures include biting restriction on shipping of Russian oil and oil products. To understand the consequences of this move let us look at the IEA’s estimate of Russian Oil Exports.

IEA's Estimate of Russian crude and oil products

The total oil and oil product export from Russia in 2021 averaged just under 8 million barrels/day. Russia is the world’s third largest oil producer behind the United States and Saudi Arabia. As per IEA, Russia is the world’s largest exporter of oil to global markets and the second largest crude oil exporter behind Saudi Arabia. In December 2021, Russia exported 7.85 mb/d of oil and oil products; of which crude and condensate accounted for 5 mb/d, or 64%. Oil product exports totalled 2.85 mb/d, of which 1.1 mb/d was gasoil, 650kb/d was fuel oil 500 kb/d was naphtha and 280 kb/d was vacuum gas oil (VGO). Gasoline, LPG, jet fuel and petroleum coke made up the remaining 350 kb/d.

Again, as per IEA about 60% of the Russian oil and oil product export goes to OECD Europe and about 8 % to USA. All OECD countries put together accounted for over 71% of Russian oil and oil product export in late 2021; with China accounting for a further 20%. So, the first thing to note is that India and the rest of the World (excluding OECD and China) is a very small buyer of Russian oil and oil products, together accounting for less than 9% of Russian exports in late 2021.

More importantly, even if the non-OECD world (including China) miraculously increased their end 2021 share of Russian oil and oil product export by 40%, despite the sanctions on shipping; and the OECD succeeds in reducing its dependence on Russian oil and oil products to 10%, of the end 2021 levels, as proposed; well over 4 million barrels a day of oil and oil products will be taken out of the supply chain! This will be the proverbial last straw on the backs of the bottom 50% humans on mother earth. With both crude and product inventories at or below the bottom of their historical bands I predict Brent rising to the $160-$175/barrel range by year end. It recently touched $123.5/barrel and is currently trading above the $121/barrel level. A rise to the $160+ range would spell economic disaster for India and the bottom half of the world that is barely coming out of the Covid crisis.

Higher gas prices are already bringing back coal and the IEA estimates that in 2021, the world equalled or surpassed the peak 2013 coal usage of 3865 MTOE. And that sets the World back on its climate commitments – once again impacting the bottom 50% disproportionately.

Do we really need this self-inflicted wound? What wrong have the bottom 50% humans done to deserve this? Have they invaded Ukraine? Has not everybody demanded an immediate cessation of hostilities, followed by dialogue? Does anyone care? Well Jeffery Sachs believes that the rich couldn’t care less! And yes, the West believes that India must be blamed for all this!

*Energy & Climate Expert, Formerly Chief Investment Officer IFC, (World Bank Group) Washington DC; Principal Advisor (Power& Energy) & Core Climate Negotiator, Govt. of India; Professor Energy & Climate Policy, LKYSPP, National University of Singapore; and UNESCO Chair Professor Climate Science & Policy, TERISAS, New Delhi.



To download the latest issue 'Volume 29 Issue 9 - August 10, 2022', click here
Petro Intelligence [FREE Access]
Crude Imports: Risks Of Playing Russian Roulette
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Swing A Wrecking Ball Before Privatisation Of Refiners
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Overhaul selection process for ONGC, OIL leadership positions
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LNG Import Deal: India Needs Clean And Tough Negotiators
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Foreign Investment
Synergia Energy Says Fracking of Cambay Well Returns Initial Positive Results
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DEEP.KBB Forms Strategic Alliance With EIL
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Overseas Investment
Cabinet Approves Additional Investment By Bharat PetroResources In Brazil
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Gas Scene
The Slowly Expanding Natural Gas Pipeline Network
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Sectoral Consumption of Natural Gas
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Rising Price Of LNG Slows Down India’s Import
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Domestic Natural Gas Scene In June
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Trends In Natural Gas Prices: Global And Domestic
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Sectoral Consumption Of Natural Gas, May 2022
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Domestic Natural Gas Scene in May 2022
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Essar, GEECL, Make Significant Progress In CBM Gas Development
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Sector-wise Consumption of natural gas in April 2022
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Trends In Natural Gas Prices: Global And Domestic
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LPG Consumption Continues Grow Forcing Larger Import
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Domestic Natural Gas Scene: Production Marginally Up, Consumption Down
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LPG Profile Based On LPG Marketing In FY 2021-22
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Natural Gas Price Trends: Global and Domestic
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Sector-Wise Consumption Of Natural Gas
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Data Section
Monthly Upstream Data
Monthly Downstream Data
Historical database
Data Archives
Special Database
Declining Domestic Share In Petroleum Products consumed
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Domestic Oil & Gas Production vis-à-vis Overseas Production
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Percentage share of petroleum products in export: April to June 2022
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India’s Refineries & Their Refining Capacities
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Oil India’s Short Term Growth Strategy
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Distillate Production and POL Production
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India’s Petroleum Products Export Marginally Down, Import Up In June
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What is Russia’s Share in India’s Crude Oil Import During April-June 22?
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Analysis Of Crude Oil Processed By Indian Refineries In June 2022
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Any Unusual Fluctuation In Production/Consumption Figures Of Petroleum Products in Recent Months?
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Crude Processing Makes A Remarkable Recovery in FY 2021-22
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India’s Domestic Crude Production Maintains A Discipline In Fall
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India’s oil import Bill: An Update
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Russia Is India’s Second Largest Crude Oil Supplier
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Average Indian Crude Basket Price In June
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How Much Petroleum Products Did India Produce And Consume In April-May 2022?
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Power Supply Deficit Position Promotes Diesel Sale
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LPG Consumption Presents A Dull Picture In May 2022
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Tenders [FREE Access]
ONGC
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