What India needs to do amid oil uncertainty in the Covid world

The post-Covid-19 world (will be) switching from “just in time” to “just in case”. This quote was brought to my attention by Pascal Lamy, the former Director-General of the World Trade Organisation (WTO), through a note in which he attributed it to the economist Alan Kirman.

This article is pegged around this quote, but rather than use it in the “future continuous” sense (“will be”), I use the auxiliary verb “should” and that too specifically for the Indian petroleum sector. The suggestion is that the decision-makers for this sector should switch to a “just in case” policy mode.

The oil market is in no man’s land. Few speak with conviction about its future trajectory. Last month, it dropped into negative territory for a day in the US; today, the price of the same crude quality is above $30 per barrel. If one reads the commentary of experts, one could be excused for thinking that oil prices will soon cross $50 per barrel or crash, once again, to below $20 per barrel.

The fine print of these reports is always caveated with the disclaimer “it all depends” on one or more of the comparably uncertain variables of economic growth: geopolitics, US-China, the timing of the development of an anti-Covid-19 vaccine or a combination of all.

The fact is that no one really knows how the petroleum sector will fare in the “new normal” of the post-Covid-19 world.

financial express
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