Even as the OPEC and non-OPEC producers agreed to extend until March 2018 their ongoing oil output cuts, India has reached an understanding with the global oil cartel to establish a joint working group to serve as a forum for "producer-consumer dialogue" to address mutual concerns.
The 13-nation Organisation of Petroleum Exporting Countries (OPEC) on Thursday agreed here to extend for nine months the output cut agreement put in place for six months effective from January 1. The extension of the accord, which was to expire in June, would effectively lower OPEC's production by 1.8 million barrels per day.
India's Petroleum Minister Dharmendra Pradhan has been camping in Vienna since the beginning of this week, leading the Indian side at the India-OPEC Energy Dialogue on Monday.
"I believe the purpose of setting up this institutional dialogue is to exactly serve this purpose, and to have a dialogue between OPEC as a producer and India as a consumer, to sensitise each other's concerns and to better understand our perspectives," he said at the meeting.
"India is the only country where the demand will continue to rise for more than a decade and this is where the need for revisiting our engagement with OPEC is felt important," he said.
Urging OPEC to work towards a "responsible pricing" for oil, Pradhan raised the vexed issue of premium being charged on oil supplied to Asian countries by some OPEC members.
In the talks with OPEC Secretary General Mohammad Sanusi Barkindo, the Indian minister told OPEC to address concerns of major buyers like India at a time when there were multiple options in a situation of supply glut caused by US shale oil.
"The revolution in shale technology in the US is an important contributor to today's level of oil prices," Pradhan said.
"Our group of seven refiners, who are here (Vienna) today, are working out details of the strategy to buy cargoes, including from the US and Canada, which is becoming very competitive," he added.
He also pointed to the rapid expansion of renewable energy in India, which has resulted, for instance, in the discovery of solar power tariffs as low as 4 US cents per unit.
Last week, Saudi Arabia and Russia agreed on the need to prolong the current agreement on oil production cuts.
In early December, oil producers outside OPEC, led by Russia, agreed to reduce output by 558,000 barrels per day (bpd). This came in the wake of OPEC's November 30 decision to cut output by 1.2 million bpd for six months effective from January 1.
This is the first time since 2001 that OPEC and some of its rivals had reached a deal to jointly reduce output to tackle the global oil glut.
Oil prices had earlier fallen by more than 50 per cent in less than two years, from levels of over $120 a barrel.
The Indian basket, comprising 73 percent sour-grade Dubai and Oman crudes, and the balance in sweet-grade Brent, closed trade on Thursday at $52.73 for a barrel of 159 litres, which was lower than the previous day's close at $53.28.