India expects Trump's return will improve oil availability, ease prices

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Last Updated18/11/2024

Donald Trump’s victory in the US presidential election and rising oil production from countries “in the Western Hemisphere” is expected to increase oil availability in the international market.

The return of Donald Trump as the US president is expected to have a significant impact on global oil dynamics. Rising oil production from countries in the Western Hemisphere, coupled with Trump’s diplomatic strategies, could lead to increased oil availability, benefiting major importers like India.

Countries Increasing Output: Nations such as the US, Canada, Brazil, and Guyana are boosting oil production.
Potential Effects on OPEC+: Higher production from non-OPEC+ countries may compel the oil bloc to reconsider its production cuts to maintain market share.
Minister’s Perspective: Petroleum Minister Hardeep Singh Puri highlighted that increased oil supply could calm markets and incentivize producers to utilize reserves for revenue generation.

India’s Vulnerability: As the world’s third-largest oil consumer, India relies on imports for over 85% of its crude oil needs, making it susceptible to global price volatility.
Economic Implications:
- Affects trade deficit, forex reserves, rupee stability, and inflation.
- Increased oil availability could ease these challenges by reducing prices.

Push for US Oil Production:
- Slogan: "Drill, baby, drill" reflects the focus on boosting production and exports.
- Rising US output has already exerted downward pressure on prices, challenging OPEC+’s market control.
Tariffs on China:
- Proposed high tariffs on Chinese imports could reduce global oil demand, as China is the largest oil importer.
Oil Price Trends and Market Competition:
- Recent Price Decline: Brent crude prices have fallen from $85 per barrel in April to $72 per barrel.
- Impact of Non-OPEC+ Suppliers: Increased production from countries like the US, Brazil, and Guyana has offset OPEC+ cuts, intensifying competition.
- Asian Buyers’ Advantage: India and other Asian countries may gain access to competitively priced crude from the US, increasing their options.

Trump’s Diplomatic Promises:
- Vows to address conflicts in the Middle East and the Russia-Ukraine war.
- Efforts to resolve these issues could stabilize the global oil market, enhancing price predictability.
- Call for Stability: Minister Puri emphasized the need for stability and predictability in oil prices to aid economic decision-making.