New Delhi [India], September 25 (ANI): Continued disruptions in oil supplies from producing countries could further widen the existing supply deficit, as global oil markets remain under pressure from tight physical supplies, geopolitical developments and changing demand, Pulkit Agarwal, Global Director, India Content, S&P Global Energy, said on Friday.
“Another day of less amount of oil coming out from producing countries creates or compounds the deficit or adds up to the deficit that already exists. There is no two ways about it,” Agarwal told ANI on the sidelines of Horizons Clean Energy Expansion India 2026 by S&P Global Energy.
Agarwal said supply-side challenges had continued to affect global oil and gas markets for more than six months.
“We have seen that the supply story of oil continues to impact the market or the availability of oil for more than six months now,” he said.
He said oil prices had moved through several peaks and declines as markets assessed when ongoing conflicts could end and when normal oil flows could resume.
Agarwal said some oil was still flowing through the Strait of Hormuz, which had helped limit a sharper rise in prices. However, he said the global oil market remained tight.
“But the world generally is in a tight spot as far as oil markets are concerned,” he said.
He added that physical oil supplies remained tight, with some challenges particularly visible in refined products.
“Diesel is one definitely where we are seeing record cracks that are there,” he said, adding that “the picture of physical oil remains tight.”
Agarwal said oil prices were influenced by several factors and could not be assessed only on the basis of current supply.
“There are a lot of variables that go into price. It is not a simple question of how much oil is coming out today. But also a question of how demand is doing. What is the demand response to the price? How much oil is expected to come out tomorrow? Is the chance of a deal better today than yesterday?” he said.
On India’s dependence on Russian oil, Agarwal said Russian crude had remained an important part of India’s oil demand equation since the Russia-Ukraine conflict began in 2022.
He said Russian oil flows to India had remained a reality over the past four years and that removing a major supplier would be difficult for any importing country, particularly when physical markets were already tight.
On diversification of oil supplies, Agarwal said there was a desire among market participants to build greater resilience. However, he noted that global oil markets had evolved over decades around logistical efficiency and the ability to source oil at competitive prices.
On hydrogen energy, Agarwal said India’s ambition to become a major exporter would require “a lot of optimism but also a bit of realism”.
He said hydrogen needed to be developed as part of a broader energy ecosystem rather than being treated as an isolated project linked to a solar plant.
Agarwal also stressed the need to increase domestic hydrogen consumption. He said India had already taken steps in sectors such as refining and fertilisers, but more work was needed to develop the ecosystem and achieve the scale required to emerge as a global hydrogen exporter.
On continuing uncertainty in global oil markets, Agarwal said market participants had gradually learned to deal with questions that were not previously part of their regular assessments.
“Like the world, everyone has learned to now deal with some of those questions. I mean, as watchers of the oil markets, no one used to think about some of these questions before. So, I mean, it is a bit of a wild west out there,” he said. (ANI)
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