 "Oil industry in 2024: Varied outcomes expected across value chain")
Come 2024, India's oil requirements are expected to continue to witness a healthy rise. Depending on which part of the value chain a company is, the year could prove a mixed bag. Offshore rig operators, for instance, are expected to command higher rentals owing to a mismatch in supply and demand.
According to rating agency Crisil, the supply of offshore rig fleet addition has not kept pace with the higher demand for crude oil exploration and production, leading to a spike in global day rates for such rigs. At the same time, the cost to move oil, however, may taper, with charter rates for crude and product tankers expected to moderate in FY25, after seeing a correction in FY24 . According to the rating agency, the correction in tanker rates in owing to easing of Covid-related supply chain constraints, however the recent attacks on cargo ships in the Red Sea remains a monitorable.
India's oil demand to remain high
| India's oil demand | Million Barrels/day |
| 2022 | 5.14 |
| 2023 | 5.37 |
| 2024 (Estimated) | 5.59 |
| Source: OPEC, December 2023 report. |
Costs to transport crude oil may moderate
| Charter Rates for crude and Product tankers | $/day |
| FY23 | 50,000 |
| FY24* | 37500- 40,000 |
| FY25 | Moderate, but >15,000-25,000 |
Costs to explore and produce crude oil may rise
| weighted average day rates for offshore rigs | $/day |
| FY23 | 35,000-40,000 |
| FY24 | 47,000 |
| FY25 | 60,000 |
| Source: CRISIL |