India’s leading state-run oil company ONGC has received a major piece of good news. The United States government has granted permission for ONGC to resume oil extraction and sales from its oil and gas wells in the South American country of Venezuela. Previously, sanctions imposed by the US had prevented ONGC from continuing its operations there. With that hurdle now cleared, the path has opened up for resuming halted oil production and ramping it up once again.
ONGC holds a 40 percent stake in the San Cristobal oil field in Venezuela and an 11 percent stake in the Carabobo project. With US approval, not only will operations resume there, but the move has also opened the door for other Indian companies to invest in the region in the coming days.
While this development brings relief to ONGC, petrol and diesel prices in the country are unlikely to come down immediately, as crude oil prices in the global market currently remain elevated. Economic experts have also warned that ongoing tensions between the United States and Iran could push oil prices even higher.
At present, crude oil is trading at around 90 dollars a barrel in the international market. If the situation continues as it is, prices could soon touch 100 dollars a barrel. Moreover, it will take some time for increased production from Venezuela to actually reach India. As such, petrol and diesel prices in the country will only come down once crude oil prices ease in the global market.