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India’sIndia’s massive cut on oil imports from Saudi, yet again massive cut on oil imports from Saudi, yet again

YB WEB DESK. Dated: 4/8/2021 12:03:27 PM

In a major decision enacted by the Indian side, India has decided to cut down on crude oil imports from Saudi Arabia yet again in a matter of a mere few months. However, this time the reduction in oil imports stands at a staggering 36% less than what it used to purchase originally. Saudi is already down from the top position as the largest oil exporter, to the fourth position, as an oil-exporting nation for India. And this decision by the Indian government will make it worse for the Saudi side as it can eventually fall further down to the fifth or even the sixth position with such a significant cut on oil imports from the Saudi kingdom. Some recent developments have managed to trigger this decision from the Indian government. Though it is not a one-off decision, it was enacted more like a string of advancements and the decisions enacted as a consequence against the same. Especially after the Saudi oil minister's remark pointing India towards using its cheap oil reserves, India opted to diversify its oil exporters, cutting down on oil imports from the kingdom. This time, seen as a move to pressure India upon realising its decision against Saudi, the kingdom state raised shipments costs from 20-50%, hoping India would revert its decision and purchase more oil from them again. Unexpected by the kingdom, India’s move was different altogether, cutting down on imports even further, which can prove to have a drastic effect on Saudi Arabia in the long run, for the very least. Although cutting down on imports from Saudi may not affect the oil-rich nation in such a significant manner at present, it will surely endure pressure on its revenue in the long run. Losing a third of its share of such a massive marketplace like India wouldn’t be of any benefit for the kingdom in the long run. India’s move to diversify its oil exporters will reduce its dependence on a sole nation for crude oil and provide better trade opportunities with several other countries, leading to better trade ties eventually. Somewhat as a protest against OPEC’s monopoly to control and artificially inflate oil prices, reducing dependence on a single nation with a better diversification of experts can be the right decision, essential for India in the long run.