What has been reported in sections of the media as a strong interest by India, the world’s third largest consumer and importer of crude oil, in establishing a long-term agreement to buy a portion of its oil supplies from Guyana, is being seen in global oil circles as a flexing of what, these days, is its considerable muscle in the oil industry.
On Monday April 26, the daily on-line newspaper, Hellenic Shipping News, reported that what had been confirmed by Guyana’s Minister of Natural Resources, Vickram Bharrat as India’s expression of interest in a long-term deal to buy oil from Guyana, had come in the wake of New Delhi’s stout opposition to a decision by the Organization of the Petroleum Exporting Countries (OPEC) to extend production cuts that increased oil prices and what the newspaper says is India’s “seeking to diversify its purchases away from top producer Saudi Arabia.”
India, the Hellenic Shipping News says, “has expressed interest in buying one of the 1 million-barrel cargoes Guyana’s government is entitled to in order to test the crude in its refineries,” a comment which it attributed to Bharrat. “If the crude is compatible,” the newspaper report says, “the parties could begin talks on a long-term arrangement.”
Given the historic socio-cultural experience which Guyana and India have shared, and the more recent diplomatic ties since Guyana’s independence, a major oil deal between the two is more than a peripheral possibility. Guyana, on the one hand, is seeking to make its way on the international oil market, while India, whose oil demand has reportedly raised by 25%, will regard the Guyana option as a measure of leverage with which to push back at what it sees as OPEC’s sustained efforts to control global oil prices. India, the Hellenic Times report says, “is now attempting to swap out Saudi supply with new origins like Guyana.”
Back in February last year a section of the local media quoted India’s Ambassador to Guyana, Dr KJ Srinivasa describing India as “an energy-hungry nation.” The Indian diplomat was also reported as saying that 85% of the country’s petroleum needs were imported and that New Delhi was interested in cementing an oil supply arrangement with Guyana “on a long term basis.”
On March 2, last, even as India was reportedly pressing its refiners to accelerate the diversification of its oil imports in order to reduce the country’s dependence on crudes from the Middle East, the first shipment of oil from Guyana to India departed for India’s Mundra Port. It was due to arrive there on April 8, last.
