Opening remarks by OPEC Secretary General

Delivered by HE Mohammad Sanusi Barkindo, OPEC Secretary General, at the 4th High-level Meeting of the OPEC-India Energy Dialogue, 5 November 2020, via videoconference.

Your Excellency, Ladies and Gentlemen, 

I wish you Namaskaar! And in these strange times wish you all very good health!

It is a great honour to hold this fourth High-level Meeting of the OPEC-India Energy Dialogue today. A very warm welcome to my cherished friend, His Excellency, the Honourable Dharmendra Pradhan, Minister of Petroleum and Natural Gas and Minister of Steel. I am sorry we have not had the chance to meet in person for so long!

It is high time for another chapter of this meeting, especially in light of the circumstances that have struck the energy markets in 2020 in the wake of COVID-19. Your country’s great enthusiasm for and support of producer-consumer dialogue has greatly contributed to OPEC’s success in pursuing sustainable stability of the oil market in recent years.

Although it has been a challenging year so far, I want to quote your famous countryman Mahatma Ghandi when he said, “Strength does not come from winning. Your struggles develop your strengths. When you go through hardships and decide not to surrender, that is strength.” We have certainly been confronted with difficulty, but in light of these extraordinary times, I can also say we have kept moving forward and thus also achieved great success, not least in the realm of multilateral dialogue.

I want to add that India has continued to value the tradition of collaboration during the height of the COVID-19 crisis, as shown through a briefing with the management of Indian Oil on May 6 and a bilateral meeting with HE Pradhan on June 3.

India is one of the world’s fastest-growing economies and a major driver of global economic and oil demand growth. With India importing around 80% of its oil from OPEC Member Countries, and investment ties increasing with India, these talks are essential to all of us. They allow us at OPEC to have a deeper understanding of facts and figures regarding supply and demand, and our technical exchanges support both OPEC and India in their mandate of securing a stable energy future.

Excellency, ladies and gentlemen,

I have had the good fortune to work closely with your good self through our OPEC-India Energy Dialogues, which began in 2015 and have become more appreciated with each passing year.

The last high-level OPEC-India dialogue was held in New Delhi in October of 2018, an event that was jointly chaired by your good self. It was the second time I was in your esteemed capital that year, the first being the 16th International Energy Forum Ministerial Meeting in April.

I recall with great clarity our discussions, at which we both agreed upon the importance of close interaction between OPEC and consuming countries such as India to address the common challenge of sustaining market stability to ensure a well-supplied market.

I will never forget my trip to India’s oldest operating refinery and one of the oldest in the world, Digboi Refinery that April. What a lasting impression it made! I got to experience a grand tradition and incredible example of India’s fine hospitality.

That same year, OPEC had the immense honour of hosting you, your excellency to the 7th OPEC Seminar in summer. At that time you talked about Prime Minister Narendra Modi’s four pillars for the country’s energy policy: energy access, energy efficiency, energy sustainability and energy security.

Your words were golden, as you underscored the reality that oil and gas are commodities of trade but also the “basics of necessity.” The impact of volatile prices on India was examined, as well as OPEC’s role in maintaining supply and demand equilibrium.

Finally, I truly appreciated your quote from Mahatma Gandhi, which intuitively reflected an idea recently adopted by the G20 meeting this September on the circular carbon economy: “Art is to provide enough to satisfy everybody’s need, but not everyman’s greed.” How apt.

I hope very much that you will again join us again to share your wisdom and enthusiasm at the upcoming 8th OPEC Seminar.

Your excellency, distinguished delegates,

Last week I had the honour of delivering remarks at the 4th India Energy Forum by CERAWeek in New Delhi. It reminded me that at the 3rd Forum just one year earlier the world was a different place. India’s GDP was at that time projected to grow by 6.1% in 2019 and 6.7% this year 2020. Stemming from the onset of COVID-19, which has dramatically affected economies around the globe, India’s GDP growth dropped in our latest Monthly Oil Market Report to
-7.5% y-o-y this year, though it is expected to rebound back to 6.8% y-o-y in 2021.

A downturn had already taken place in India in 2019 and the GDP at that time slowed to 4.9% — the lowest growth since the 2009 financial crisis. The pandemic has caught us all at a vulnerable time. Our fellow global citizens are suffering terribly, both from record high rates of the virus itself and its resulting economic devastation. We all pray that this terrible sickness that this terrible pandemic and the virus will pass quickly.

The events I have mentioned feel like they took place a millennium ago, due to the sharp and clear line that marks life before and after COVID-19. Back then, your excellency, we could still enjoy meeting in person and shaking each other’s hands! We hope that soon we will have the chance to meet again in person. The effects of the pandemic have been absolutely horrifying, not only at the human level, but also regarding the oil market and the global economy. It has resulted in the sharpest downturn in energy and oil demand in living memory. The scale and reach of the pandemic is to say the least unprecedented.

There is an Indian proverb that goes: “We cannot change the direction of the wind, but we can adjust the sails.”

This adeptly describes the actions of our Declaration of Cooperation partners over the past eight months, as they quickly and boldly moved to stabilize oil prices and rebalance the oil markets. The DOC participants collectively adjusted down production over a two-year period, starting with 9.7 mb/d — the deepest and the longest adjustment in history, and nearly five times more than historic adjustments made during the last downturn of 2014-16. This dramatic action has helped put markets on a path to rebalancing, though the road to recovery is most certainly still going to be long and wrought with difficulty.

I am happy to report that we see India's fuel demand rising in September for the first time since June, as easing COVID-19 restrictions support economic activity and travel, according to government data.

The US has seen stronger-than-expected economic indicators in the third quarter of this year, with 2020 growth revised up from last month’s –5.1% to –4.2% in the latest Montly Oil Market Report. We also see significant overall oil demand growth of +6.5 mb/d in 2021. Although we find ourselves in a difficult situation, we are optimistic that the future will be much brighter and that the world will see a way out of this pandemic next year.

Positively, your Excellency, our recently released World Oil Outlook also indicates that the medium-term future growth looks very, very upbeat for India. This is due to major structural reforms in 2017 and 2018, under your able leadership, along with government-led stimulus measures in combination with a recovery in the global economy. After the 2020 slowdown, the economy is forecast to expand by more than 6% for the rest of the medium-term period, accelerating slightly after 2022.

At the same time, you are setting a high bar on addressing climate change issues through your National Mission on Enhanced Energy Efficiency, along with strong support for renewables through subsidies and tax incentives, as well as tightened fuel specifications. I was also very impressed at the 4th Indian Energy Forum, held on October 26, when Prime Minister Modi announced new targets for the energy mix of your esteemed country, with emphasis on natural gas.

At that event, Prime Minister Modi outlined a new energy map of India focusing on seven key drivers: Accelerating efforts to move towards a gas-based economy; cleaner use of fossil fuels; greater reliance on domestic sources to drive biofuels; achieving a renewables target of 450 GW by 2030; increasing the contribution of electricity to de-carbonize mobility; moving into emerging fuels like hydrogen; and digital innovation across all energy systems.

You said your excellency at that meeting: “The energy agenda in India is inclusive, market-based, and climate sensitive.”

I think the world will applaud that.

With all its efforts, India’s primary energy sources are more flexible and diversified than in many countries, thus strengthening energy security. The World Oil Outlook projects your transition to clean energy sources by 2045 will accelerate, with renewables accounting for about 6% of the energy mix by the end of the outlook period.

At the same, due to the rapidly growing need for energy in your ever-expanding country — it is expected to quadruple by 2045 — India is predicted to be the largest contributor to incremental oil demand over the longer term, adding some 6.3 mb/d between now and 2045. With this in mind, the strengthening connection between OPEC and India represents a key element in energy security. Indeed, given the future outlook, we will have much to discuss today. We hope, your excellency, that our relationship will continue to deepen, including addressing the role of OPEC as a partner in the energy transition.

We have always said that all sources of energy will be needed to meet growth in energy requirements in the coming decades. At the same time, the entire world is threatened by climate change. It is up to all energy producers and consumers to do their utmost to make all sources of energy cleaner and greener.

Your Excellency, ladies and gentlemen,

This meeting follows on the heels of our 3rd Technical Meeting of the OPEC-India Energy Dialogue held a few days ago on November 2. We will expand on some of the dialogues started on that day, including the impact of COVID-19 on oil markets and security of India’s energy supply.

We will also discuss the roles of the Declaration of Cooperation between OPEC and non-OPEC and the Charter of Cooperation in maintaining oil market stability on a sustainable basis.

As always, we are looking for ways to enhance future collaboration, including addressing the issues of energy poverty and energy security. Within the framework of the OPEC-India Energy Dialogue we have already accomplished so much, including important endeavours in research activities and data sharing. Yet there is so much more we can do together! Your commitment to discourse massively aided in the success achieved in helping to restore stability to global oil markets in 2017-2019, and again since the unprecedented downturn this year due to COVID-19. I deeply appreciate, your Excellency our deepening relationship and your continued commitment to this joint endeavor.

We are very excited about our exchange today and look forward to a very productive day and wish you all the best.

Namaste.

HE Mohammad Sanusi Barkindo, OPEC Secretary General

HE Mohammad Sanusi Barkindo, OPEC Secretary General

HE Dharmendra Pradhan, Minister of Petroleum and Natural Gas and Minister of Steel

HE Dharmendra Pradhan, Minister of Petroleum and Natural Gas and Minister of Steel