Mint Quick Edit | Opec’s scramble is doing India a good turn
War clouds over Iran have cleared, even though US President Donald Trump’s tariff policy has impacted global demand conditions. As it happens, both these factors favour crude oil consumers.
On Monday, Brent crude oil prices fell to $67.83 per barrel after the Organization of the Petroleum Exporting Countries (Opec) and its allies raised their production target by 548,000 barrels per day for August.
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While Brent later rebounded, this extra supply would exceed the cartel’s last increase of 411,000 barrels per day for the preceding three months (a major ramp-up). The cartel cited tight supply and healthy demand, although the global market’s story is quite the opposite.
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Abundant supply amid weak consumption in a tariff-rattled world economy has spelt a glut. This suggests we can expect prices to stay range-bound in a comfort zone, even as Opec scrambles for market share now that it’s clear it can’t count on hardening prices to meet the revenue aspirations of its member countries.
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For importers such as India, this sounds just fine. With global trade patterns undergoing an upheaval, it’s best if India’s oil dependence doesn’t complicate its balance of payments.
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