India's Oil Minister Hardeep Singh Puri on Tuesday told the World Economic Forum that crude oil price of USD 110 a barrel was not sustainable, even as he courted the world's oil leaders to discuss global energy markets.
International oil prices spiked this year, hitting a near 14-year high of USD 140 a barrel in March, after Russia's invasion of Ukraine exacerbated supply concerns. They have retreated but continue to be above USD 110 -- a rate that is fueling inflation and impacting economic recovery in many parts of the world.
"Do not believe that the world today is facing an energy shortage. We are facing a situation where the amounts of energy released in the global market are short of the demand. That's what causes the inflationary problem," Puri said, hinting at output curbs by the oil producers' cartel OPEC+.
The world is facing an energy price crisis which is contributing to rising global inflation.
"It is beyond doubt that the current global energy crisis is a 'management crisis', and the same can be quietly reversed if major suppliers decide to release the extra quantity of the oil they're holding back," he said.
On the sidelines of WEF, he met Amin H Naseer, President and CEO of Saudi Aramco, the world's largest oil producer.
"Wide-ranging discussion about energy markets as well as bilateral cooperation" happened with Nasser, Puri tweeted with a picture of the meeting.
He also met OPEC secretary-general Mohd Sansui Barkindo and International Energy Agency executive director Fatih Birol.
India is 85 per cent dependent on imports to meet its oil needs and any spike in global prices has a direct bearing on the economy. Besides leading to rise in prices of petrol, diesel and cooking gas (which are produced from crude oil), it has an indirect inflationary impact as transportation costs for all goods and services rise.
Oil prices together with some local factors have pushed inflation rate to a record high in April. This prompted the government to cut excise duty last week on petrol and diesel to cool off prices.
India has been pleading with OPEC and its allies, called OPEC+, to not artificially control output and allow it to match demand. OPEC+, however, has till now ignored such calls and continued to adopt a calibrated increase in output.
"Very glad to meet with my friend @HardeepSPuri, India's Minister for Petroleum & Natural Gas, at Davos to discuss the situation in global energy markets & how to tackle the current challenges. Grateful for Minister Puri's support in further strengthening the IEA-India relationship," Birol tweeted.
Puri also met his Indonesian counterpart.
"Discussed issues pertaining to the energy markets & ways to enhance our bilateral cooperation in a productive meeting with Indonesian Minister of Energy & Mineral Resources Mr Arifin Tasrif," he tweeted.
Puri said India will drive energy demand and growth of the global economy for the next 2-3 decades and high oil prices will hasten the transition to alternative fuels.