Originally posted in The Business Standard on 23 May 2022
Russia has offered to sell crude oil to Bangladesh, said State Minister for Power, Energy, and Mineral Resources Nasrul Hamid.
He made the disclosure while talking to journalists at the Bidyut Bhaban in Dhaka on Monday.
“However, there are some issues regarding the payments.
“We will move forward with this when a solution is found,” the state minister added.
At present, the country imports around 91% to 92% of its fuel demand while the rest is sourced from local gas fields in the form of condensate, a bio-product of gas.
The Bangladesh Petroleum Corporation (BPC) has a storage of one month — equivalent to six lakh tonnes of fuel — at major land and riverine depots across the country.
BPC increased prices (Tk15/liter) of diesel and kerosene in the backdrop of price increase in the international market for petroleum at $85 per barrel (158.99 liters) in November last year.
In December, 2021, the demand for fuel oil in Bangladesh was over 60 million tonnes.
Russia has been selling oil to India and China — two rapidly growing economies that have disregarded sanctions following the Russia-Ukraine War.
Purchases made by India soared in April as it bought 627,000 barrels a day from Russia, compared with 274,000 barrels a day in March.
According to S&P Global, an international data news company, the April daily figure was 20 times India’s daily average for Russian imports last year.
India’s total oil consumption in 2021 stood at 4.76 million barrels a day.
Whereas, China was already Russia’s biggest Asian customer. The manufacturing hub of the world needs the oil to fuel its growing automobile and petrochemical industries.
Meanwhile, oil prices in the international market rose in early trade on Monday with US fuel demand, tight supply and a slightly weaker US dollar supporting the market, as Shanghai prepares to reopen after a two-month lockdown fuelled worries about a sharp slowdown in growth.
Brent crude futures rose 82 cents to $113.37 a barrel at 0126 GMT, while US West Texas Intermediate (WTI) crude futures climbed 69 cents, or 0.6%, to $110.97 a barrel, adding to last week’s small gains for both contracts.
A weaker US dollar also sent oil higher today (May 23), as that makes crude cheaper for buyers holding other currencies.
Market gains have been capped, however, by concerns about China’s efforts to crush Covid with lockdowns, even with Shanghai due to reopen on 1 June.
Lockdowns in China, the world’s top oil importer, have hammered industrial output and construction, prompting moves to prop up the economy, including a bigger-than-expected mortgage rate cut last Friday.
The European Union’s inability to reach a final agreement on banning Russian oil for its invasion of Ukraine, which Moscow calls a “special operation”, has also stopped oil prices from climbing much higher.