IEA Warns Saudi Arabia's Oil Production Cut Plan To Tighten Indian Economy

The International Energy Agency (IEA) on Tuesday predicted tight global markets for India in the second half of the year. According to the agency, Saudi Arabia's oil production cut plan is the prime reason for the gloomy economic future.

Commenting on the matter, Fatih Birol, Executive Director of the International Energy Agency said, "India is the country that is listed among the majority of oil and energy importers and the prediction about the oil cut plans is likely to impact the country’s import bill eventually overburdening the Indian economy and consumers."

He stressed that Saudi Arabia and other OPEC-plus producers have decided to cut oil production and looking at the IEA analysis, the second half of this year’s markets seem very tight. This decision is risky for the global economy, Birol added.

He further mentioned the Russian oil ban and said that since the war started, the Russian oil and gas export revenues declined by 60 per cent and caused a major challenge for the Russian economy.

According to Birol, India is identified as a key crude oil importer and is subsequently known for the re-exports of refined oil to European countries, a legitimate action that the country practices.

Talking about the impact of Ukraine's war on the energy sector, Birol emphasised that renewable energies promote peace. He then underlined Russia is facing global competition in producing and exporting gas.

He expressed optimism about the influx of liquefied natural gas (LNG), stating the near future will witness lower prices and alleviate concerns about gas supply security.