With Iran declaring its intent to increase current oil production by around 50 percent, the Indian basket of crude oils fell overnight by over a dollar and half, at close of trade, to under $25 a barrel on the previous trading day on Monday, as per official data here.
The Indian basket, comprising 73 percent sour-grade Dubai and Oman crudes and the balance in sweet-grade Brent, closed on Monday at $24.96 for a barrel of nearly 160 litres. It had touched a previous monthly low of $24.21 in April of 2003.
Marking a 13-year low, the price of the Organisation of Petroleum Exporting Countries (OPEC) basket of twelve crudes stood at $23.58 a barrel on Monday, compared to $24.74 on the previous Friday, said the organisation’s secretariat said.
India can resume its unrestricted import of oil from Iran, which is expected to increase its export of 1.1 million barrels of oil per day by 500,000 soon, followed by a further 500,000 bpd thereafter, thus adding to the supply glut that has resulted in global prices plunging in a year from levels of $120-$130 a barrel to below $30.
With OPEC deciding last December against cutting output, traders are betting the cartel is less likely to cut output now to prevent easy passage of Iranian crude into the market, particularly at a time of tensions between Iran and Saudi Arabia.
In comments posted on the Iranian petroleum ministry’s website on Monday, deputy minister Roknoddin Javadi said Iran is determined to regain its market share, which collapsed after the international sanctions were imposed in 2012.
He said Iran plans to increase oil production by 500,000 barrels a day.
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