Indian Basket (IB), also known as Indian Crude Basket, is weighted average of Dubai and Oman (sour) and the Brent Crude (sweet) crude oil prices. It is used as an indicator of the price of crude imports in India and Government of India watches the index when examining domestic price issues. [1]
The Indian basket of Crude Oil represents a derived basket comprising Sour grade (Oman and Dubai average) and Sweet grade (Brent Dated) of Crude oil processed in Indian refineries. During the year 2018-19,the ratio is 75.50 : 24.50 (Dubai : Brent respectively) [2] and during the year 2017-2018, the ratio was 74.77 : 25.23 (Dubai : Brent). The Indian Basket is weighted average of daily prices and is updated daily on the website of the Petroleum Planning and Analysis Cell of the Ministry of Petroleum and Natural Gas. [3]
| Year | Price | Comments |
|---|---|---|
| 2000-2001 | $26.92 | [4] |
| 2001-2002 | $22.55 | |
| 2002-2003 | $26.60 | |
| 2003-2004 | $27.98 | |
| 2004-2005 | $39.21 | |
| 2005-2006 | $55.72 | |
| 2006-2007 | $62.46 | |
| 2007-2008 | $79.25 | |
| 2008-2009 | $83.57 | |
| 2009-2010 | $69.76 | |
| 2010-2011 | $85.09 | |
| 2011-2012 | $111.89 | |
| 2012-2013 | $107.97 | |
| 2013-2014 | $105.52 | |
| 2014-2015 | $84.16 | |
| 2015-2016 | $46.17 | |
| 2016-2017 | $47.56 | |
| 2017-2018 | $56.43 | |
| 2018-2019 | $69.88 | |
| 2019-2020 | $60.47 | |
| 2020-2021 | $48.94 | (Dec 2020 only) |
The economy of Oman is mainly centered around its oil sector, with fishing and trading activities located around its coastal regions. When oil was discovered in 1964, the production and export increased significantly. The government has made plans to diversify away from oil under its privatization and Omanization policies. This has helped raise Oman's GDP per capita continuously in the past 50 years. It grew 339% in the 1960s, reaching a peak growth of 1,370% in the 1970s. Similar to the pricing of all other commodities, the price of oil is subject to significant fluctuations over time, especially those associated with the business cycle. A commodity's price will rise sharply when demand, like that for oil, outpaces supply; meanwhile, when supply outpaces demand, prices will fall.
Petroleum, also known as crude oil, or simply oil, is a naturally occurring yellowish-black liquid mixture of mainly hydrocarbons, and is found in geological formations. The name petroleum covers both naturally occurring unprocessed crude oil and petroleum products that consist of refined crude oil. A fossil fuel, petroleum is formed when large quantities of dead organisms, mostly zooplankton and algae, are buried underneath sedimentary rock and subjected to both prolonged heat and pressure.
The Strategic Petroleum Reserve (SPR) is an emergency stockpile of petroleum maintained by the United States Department of Energy (DOE). It is the largest publicly known emergency supply in the world; its underground tanks in Louisiana and Texas have capacity for 714 million barrels (113,500,000 m3). The United States started the petroleum reserve in 1975 to mitigate future supply disruptions as part of the international Agreement on an International Energy Program, after oil supplies were interrupted during the 1973–1974 oil embargo.
West Texas Intermediate (WTI) is a grade or mix of crude oil; the term is also used to refer to the spot price, the futures price, or assessed price for that oil. In colloquial usage, WTI usually refers to the WTI Crude Oil futures contract traded on the New York Mercantile Exchange (NYMEX). The WTI oil grade is also known as Texas light sweet, oil produced from any location can be considered WTI if the oil meets the required qualifications. Spot and futures prices of WTI are used as a benchmark in oil pricing. This grade is described as light crude oil because of its low density and sweet because of its low sulfur content.
Sweet crude oil is a type of petroleum. The New York Mercantile Exchange designates petroleum with less than 0.5% sulfur as sweet.
Brent Crude may refer to any or all of the components of the Brent Complex, a physically and financially traded oil market based around the North Sea of Northwest Europe; colloquially, Brent Crude usually refers to the price of the ICE Brent Crude Oil futures contract or the contract itself. The original Brent Crude referred to a trading classification of sweet light crude oil first extracted from the Brent oilfield in the North Sea in 1976. As production from the Brent oilfield declined to zero in 2021, crude oil blends from other oil fields have been added to the trade classification. The current Brent blend consists of crude oil produced from the Forties, Oseberg, Ekofisk, Troll oil fields and oil drilled from Midland, Texas in the Permian Basin.
Crack spread is a term used on the oil industry and futures trading for the differential between the price of crude oil and petroleum products extracted from it. The spread approximates the profit margin that an oil refinery can expect to make by "cracking" the long-chain hydrocarbons of crude oil into useful shorter-chain petroleum products.
Dubai Crude is a medium sour crude oil extracted from Dubai. Dubai Crude is used as a price benchmark or oil marker because it is one of only a few Persian Gulf crude oils available immediately. There are two other main oil markers: Brent Crude and West Texas Intermediate.
Sour crude oil is crude oil containing a high amount of the impurity sulfur. It is common to find crude oil containing some impurities. When the total sulfur level in the oil is more than 0.5%, the oil is called "sour".
The price of oil, or the oil price, generally refers to the spot price of a barrel of benchmark crude oil—a reference price for buyers and sellers of crude oil such as West Texas Intermediate (WTI), Brent Crude, Dubai Crude, OPEC Reference Basket, Tapis crude, Bonny Light, Urals oil, Isthmus, and Western Canadian Select (WCS). Oil prices are determined by global supply and demand, rather than any country's domestic production level.
A benchmark crude or marker crude is a crude oil that serves as a reference price for buyers and sellers of crude oil. There are three primary benchmarks, West Texas Intermediate (WTI), Brent Blend, and Dubai Crude. Other well-known blends include the OPEC Reference Basket used by OPEC, Tapis Crude which is traded in Singapore, Western Canadian Select used in Canada, Bonny Light used in Nigeria, Urals oil used in Russia and Mexico's Isthmus. Energy Intelligence Group publishes a handbook which identified 195 major crude streams or blends in its 2011 edition.
Bharat Petroleum Corporation Limited (BPCL) is an Indian public sector undertaking under the ownership of the Ministry of Petroleum and Natural Gas,Government of India. It operates three refineries in Bina, Kochi and Mumbai. BPCL is India's second-largest government-owned downstream oil producer, whose operations are overseen by the Ministry of Petroleum and Natural Gas. It was ranked 309th on the 2020 Fortune list of the world's biggest Public sector undertakings in India, and 792nd on Forbes's 2021 "Global 2000" list.
The OPEC Reference Basket (ORB), also referred to as the OPEC Basket, is a weighted average of prices for petroleum blends produced by OPEC members. It is used as an important benchmark for crude oil prices. OPEC has often attempted to keep the price of the OPEC Basket between upper and lower limits, by increasing and decreasing production. This makes the measure important for market analysts. The OPEC Basket, including a mix of light and heavy crude oil products, is heavier than both Brent crude oil, and West Texas Intermediate crude oil.
The Dubai Mercantile Exchange (DME) is a commodity exchange based in Dubai currently listing its flagship futures contract, DME Oman Crude Oil Futures Contract (OQD). Launched in 2007, the DME aims to become the crude oil pricing benchmark for the Asian market with its Oman Crude Oil contract, like the Intercontinental Exchange’s (ICE) North Sea Brent is to Europe and the New York Mercantile Exchange’s (NYMEX) West Texas Intermediate is to North America.
The Ministry of Petroleum and Natural Gas (MOP&NG) is a ministry of the government of India responsible for the exploration, production, refining, distribution, marketing, import, export, and conservation of petroleum, natural gas, petroleum products, and liquefied natural gas in the country. The ministry is headed by the Cabinet Minister Hardeep Singh Puri. M. M. Kutty is the Secretary of the Ministry. Dharmedndra Pradhan serving as the minister from 26 May 2014 to 7 July 2021 is the longest serving minister till date.
From the mid-1980s to September 2003, the inflation adjusted price of a barrel of crude oil on NYMEX was generally under $25/barrel. Then, during 2004, the price rose above $40, and then $60. A series of events led the price to exceed $60 by August 11, 2005, leading to a record-speed hike that reached $75 by the middle of 2006. Prices then dropped back to $60/barrel by the early part of 2007 before rising steeply again to $92/barrel by October 2007, and $99.29/barrel for December futures in New York on November 21, 2007. Throughout the first half of 2008, oil regularly reached record high prices. Prices on June 27, 2008, touched $141.71/barrel, for August delivery in the New York Mercantile Exchange, amid Libya's threat to cut output, and OPEC's president predicted prices may reach $170 by the Northern summer. The highest recorded price per barrel maximum of $147.02 was reached on July 11, 2008. After falling below $100 in the late summer of 2008, prices rose again in late September. On September 22, oil rose over $25 to $130 before settling again to $120.92, marking a record one-day gain of $16.37. Electronic crude oil trading was temporarily halted by NYMEX when the daily price rise limit of $10 was reached, but the limit was reset seconds later and trading resumed. By October 16, prices had fallen again to below $70, and on November 6 oil closed below $60. Then in 2009, prices went slightly higher, although not to the extent of the 2005–2007 crisis, exceeding $100 in 2011 and most of 2012. Since late 2013 the oil price has fallen below the $100 mark, plummeting below the $50 mark one year later.
Western Canadian Select (WCS) is a heavy sour blend of crude oil that is one of North America's largest heavy crude oil streams and, historically, its cheapest. It was established in December 2004 as a new heavy oil stream by EnCana (now Cenovus), Canadian Natural Resources, Petro-Canada (now Suncor) and Talisman Energy (now Repsol Oil & Gas Canada). It is composed mostly of bitumen blended with sweet synthetic and condensate diluents and 21 existing streams of both conventional and unconventional Alberta heavy crude oils at the large Husky Midstream General Partnership terminal in Hardisty, Alberta. Western Canadian Select—the benchmark for heavy, acidic (TAN <1.1) crudes—is one of many petroleum products from the Western Canadian Sedimentary Basin oil sands. Calgary-based Husky Energy, now a subsidiary of Cenovus, had joined the initial four founders in 2015.
Indian Strategic Petroleum Reserves Limited (ISPRL) is an Indian company responsible for maintaining the country's strategic petroleum reserves. ISPRL is a wholly owned subsidiary of the Oil Industry Development Board (OIDB), which functions under the administrative control of the Ministry of Petroleum and Natural Gas.
The petroleum industry in India dates back to 1889 when the first oil deposits in the country were discovered near the town of Digboi in the state of Assam. The natural gas industry in India began in the 1960s with the discovery of gas fields in Assam and Maharashtra. As on 31 March 2018, India had estimated crude oil reserves of 594.49 million metric tonnes (Mt) and natural gas reserves of 1339.57 billion cubic metres of natural gas (BCM).
