New Delhi: Oil prices will hover around $65 per barrel as ample supplies are available in the market, Oil Minister Hardeep Singh Puri has said.
“My sense is that with more supplies becoming available, prices will be close to $65, not $80 per barrel,” Puri told an industry gathering on Friday.
International benchmark Brent has been oscillating between $60 and $66 for a month amid increasing supplies from the producer group OPEC+ and rising demand uncertainties due to the US tariff war.
High spare production capacity is weighing on the oil market, Puri said. “Even when there are disruptions, the market knows that more supply is available,” he added, noting that one has to be “intelligent” in using the opportunity provided by low oil prices. “Obviously, when you have strategic reserves, you want to fill them up when the price is low.”
The government has allocated ?5,600 crore in this year’s budget to fill the nation’s part-empty Strategic Petroleum Reserves (SPR).
Puri said global supplies could further rise in the future if sanctions are lifted on Iran and Russia. “I’m optimistic that, at some stage, the [sanctions] issue will be resolved. Iran will become a major supplier again,” he said, adding that Russia could also ramp up production.
Iran accounted for a tenth of India’s crude imports until 2018, when the reimposition of US sanctions shut it out of the Indian market.
The US is currently renegotiating with Iran to strike a deal that would lift sanctions in return for Tehran’s promise to halt its nuclear weapons programme.
