The crude oil markets are in turmoil on many fronts
and the price has been falling for the past few days, although the rate of fall
gradually came down – an indication the values may turn green on the stock
traders soon.
In these circumstances, the last thing that any
investor in the sector wants to hear is the infighting in the OPEC+ or
conflicts involving buyers and producers.
Against this backdrop, the talks between the new Indian
Minister for Petroleum and Natural Gas, Hardeep Singh Puri, and his Saudi
counterpart, Prince Abdulaziz bin Salman, was a good sign in boosting the positive
sentiments in the crude oil markets.
Since India is the world’s third largest importer of
the crude oil, warming relations between the two old allies are good for both
sides and the region.
The relations between the two countries deteriorated
in April over the production cuts by the OPEC+ and the Saudi minister and the
former Indian Minister for Petroleum and Natural Gas publicly fell out that
resulted in India’s oil imports from the Kingdom being curtailed – perhaps, the
minister losing his portfolio, a few months later as a result.
Judging by the sentiments expressed by the new
Indian Minister for Petroleum and Natural Gas and Prince Abdulazis bin Salman,
the relations appear to be on a solid footing; Saudis may take the production
issue seriously as a gesture of goodwill , a major concern of India in pursuit
of reviving its battered economy.
The disagreement between the UAE and Saudi Arabia
that rattled the markets recently, meanwhile, was a major serious development
within the OPEC+ for years, because there were supposed to be strong allies –
Arab, Sunni Muslim neighbours.
They were in unison in quite a few policy decisions
too: the stance against Qatar, a few years ago, the fighting in Yemen, and the disagreement
with Russia over the crude oil price last year, to name but a few.
On Tuesday, meanwhile, there was a false dawn; the
supposedly amicable deal reached by Saudi Arabian and the UAE; the UAE quickly
denied that was the case and the crude oil markets slipped into downward
spiral; crude markets are still trying to recover from the shock.
Although there is no sign of an agreement between
the two countries, they clearly are talking to each other – an encouraging
sign. As the international pressure grows, they may reach an irreversible
agreement that could get the nod from the fellow OPEC+ member in turn, as the
latter do not want to be in this limbo either.
