Some economists have argued that shipping oil overseas wouldnt contribute to higher prices at the pump.
The geopolitics has taken over the oil market, pushing crude oil prices up to three-year highs, he noted. Saudi Arabia, Iran, Venezuela, and Russian Federation are all big oil exporters and will, to varying degrees, use the coming windfall to do things that liberal democracies will not appreciate.
US crude inventories fell 1.3 million barrels in the week to May 18 to 433.9 million, data from the American Petroleum Institute industry group showed on Tuesday, compared with analysts' expectations for a decrease of 1.6 million barrels.
The main non-Iranian factor is Venezuela, where production has been falling steadily.
Falling Venezuelan output due to an economic crisis has helped the Organization of the Petroleum Exporting Countries deliver a bigger cut than intended under its pact with Russian Federation and other producers to curb supplies and remove a global glut.
Dudley said he saw oil prices falling to between $50 and $65 because of surging shale output and OPEC's capacity to boost production to cover a potential shortfall in Iranian supplies owing to US sanctions. As against an average price of $46.2/barrel for the Indian basket of crude oil in FY16, it rose to $56.4/barrel in FY18 and averaged $65/barrel in the fourth quarter of FY18. "This is damaging investor sentiment in an election heavy year", said the analyst. Government has projected that India's oil import bill may rise by over $50 billion in FY19 over $ 88 billion worth of oil imports in FY 18.
" "Nucléaire iranien: " l'accord de 2015, est un bon accord " (Macron)
Juncker doit par ailleurs présenter un état des lieux des discussions en cours avec les Américains au sujet des droits de douane sur l'acier et l'aluminium .
All OPEC members are satisfied with the benefits of higher crude prices, according to the expert.
Noting that people, especially the middle-class, have to suffer due to price hike of oil, the minister said the government would try to work out a solution soon to deal with the situation.
Over the past 12 months, during the second half of 2017 and into the first half of 2018, oil prices have been in an nearly non-stop bull market, going ever-upward. Adding to the problem is the strengthening dollar against all countries.
In short, one could safely conclude that higher crude prices will adversely affect the twin deficits-fiscal and current account deficit-of the economy, which will have spillover impact on the monetary policy, and consumption and investment behaviour in the economy. But, higher oil prices could also spell good times for state-owned upstream companies such as ONGC and OIL and private explorers Cairn and Reliance Industries as these could maximize their revenue by having higher margin on sale of crude.
And as prices rise, oil producers will be able to achieve their revenue targets by holding output unchanged rather than increasing it. Till such time, the country would like to support oil production cuts.