“India, China Figure Prominently in Gulf Oil Marketing Strategies”
Now, this would not have exactly come as a surprise what with the two Asian countries considered to be some the fastest growing countries in terms of energy consumption, but possibly the intensity with which the gulf countries woo India could be much higher than what one would have thought.
While OPEC forecasts that global oil demand in 2009 will see its biggest decline in 26 years, down 1.5 to 2 billion barrels per day, emerging economies such as China, India and Brazil, which are still enjoying strong economic growth despite the crisis, are expected to see this continue, pulling their oil demand up at the same time…
…the demand in the first quarter of 2009 slipped into the red for the first time since 2005, and could end up with 2 to 3 percent growth by the year’s end.
In contrast, India’s minister for petroleum and natural gas, Murli Deora, expects India’s current demand of 3.2 million barrels a day to grow 6 percent annually.
Therefore, when Gulf oil producers sit down to strategize on which growth market they need to be addressing, China and India emerge at the top…”
Now, you might ask, “Why should the middle east bother about India in such a big way? This recession will end in a year or so and the rest of the world will require all the oil the mid east can produce. Why bother getting themselves tensed-up for a temporary phenomenon?”. I think there are two answers.
1. India and China will continue to matter in the medium and long run, so these countries might as well invest time and resources – willy nilly – into developing relations with these big energy consumers.
2. Mid east oil producing countries depend on oil for most if not all their export earnings. That is, if they are able to export 20% less oil in a year, that’s 20% less total export dollars, and for some of those countries which have not built any other productive assets, this could even mean 20% less GDP (ok, I am being sarcastic here, but I might be right after all, beware). Oil sales is all most of these countries do to earn money, and a year (of reduced money) is a long time if that is all the money you make. And a year of drastically reduced money (low oil prices * low volume offtake) could mean big, big trouble in these countries.
I’m sure India and China loves all the attention they are getting from the Middle East – last many decades it was the other way round – but I reckon it will be a far more pleasant feeling if both countries up the tempo on renewable energy resources and whatever extra fossil fuels they can rack up within their own shores. There is no feeling as sweet as the feeling of independence.