The price of Brent crude experienced a decline to $80.6 per barrel, even with the recent announcement by OPEC and its allies to prolong the production reduction of 1.7 million barrels per day until 2024. Forecasters predict that going forward, the price of crude will stay between $80 and $85 per barrel. India, which imports crude oil to cover 85% of its needs, is expected to benefit from the favourable forecast for Brent crude prices.
Due to the softening of crude prices and the diversification of the supply, the import bill has decreased recently, with a significant portion of imports coming from Russian Ural. Brent and the Indian basket of crude remain closely related. The net cost for petroleum imports decreased by almost a quarter to $68 billion during the April–October period of this fiscal year, from $90.1 billion during the same time the previous year, despite an increase in import quantities.
Even if the goods trade deficit hit an all-time high of $31.5 billion in October, a lower crude oil import bill will ease concerns about the current account imbalance. The goal of OPEC and its allies’ decision was to stop any price decline while demand from the largest users was declining. Additionally, the move serves as a buffer against future price declines stemming from a potential drop in the demand for petroleum. On Friday, OPEC+ declared that it would cut its oil production by 1.7 million barrels per day through March 2024.
Furthermore, Russia increased the voluntary export limit it had set at 500,000 barrels per day, or 300,000 barrels per day for oil and 200,000 barrels per day for petroleum products. Brazil decided to join the OPEC+ alliance as another result of the meeting. At 3.6 million barrels per day, the nation ranks as the eighth-largest oil producer. As per estimates, the inclusion of Brazil’s production in OPEC+ will increase the global market share to over 60% and bring it back to its 2018 levels.
