Supply route disruptions driving crude prices: Puri

New Delhi: Union Petroleum and Natural Gas Minister Hardeep Singh Puri addressed supply route disruptions and their impact on crude prices on Wednesday. Speaking at the 20th Foundation Day celebrations of the Petroleum and Natural Gas Regulatory Board (PNGRB), Puri highlighted that the world currently has 104 million barrels of oil available per day, exceeding the global consumption of 94 million barrels.

However, he stressed that disruptions to key supply routes have driven up freight costs and energy prices, rather than a shortage of oil.

Puri clarified that the global energy market challenge is not a lack of oil supply but rather obstructions in supply routes. He emphasized that despite the world's oil availability, the obstruction of supply routes, combined with high freight charges, contributes to the current price surge. Global oil consumption, at 94 million barrels, is below the available supply of 104 million barrels.

The Union Minister mentioned several geopolitical events affecting global energy markets, such as the Russia-Ukraine conflict and the closure of the Strait of Hormuz. He noted that the Strait of Hormuz, which handles 40% of global energy, has emerged as a major chokepoint. Amidst these disruptions, Puri stated that India is actively working to boost domestic oil and gas production to lessen its reliance on international energy market volatility.

In this context, Puri shared the early outcomes of the government's Samudra Manthan initiative, indicating the first signs of increased domestic production. He expressed confidence that higher domestic production would help alleviate some challenges faced by India due to international pricing pressures. Puri also addressed concerns about domestic production and rising consumption, emphasizing the need for increased production alongside growing demand. He cautioned that if wells are not adequately maintained, production could decline over time.

Puri assured that India would continue to strengthen domestic production while navigating external risks impacting global energy markets. He concluded on an optimistic note, urging everyone to remain hopeful and confident that India would effectively manage these challenges.