Former BP CEO Bob Dudley has expressed his view that the future path of oil prices will primarily hinge on China's economic rebound.

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During a discussion with CNBC-TV18, Dudley indicated his belief that oil prices are unlikely to exceed their present levels. Moreover, he disclosed his enduring positive outlook on India.

On Wednesday, oil prices experienced a drop in anticipation of an OPEC+ ministerial panel meeting. This decline came as the market assessed the prospects of supply constraints versus concerns over reduced fuel demand due to elevated interest rates.

Brent crude oil futures saw a decrease of 18 cents, equivalent to 0.2 percent, settling at $90.74 per barrel as of 0611 GMT. Concurrently, US West Texas Intermediate crude (WTI) also saw a decline of 20 cents, bringing it to $89.03 per barrel.

In a separate development, Hardeep Singh Puri, India's Union Minister for Petroleum and Natural Gas, expressed confidence in India's ability to manage oil prices exceeding $100 per barrel. However, he cautioned that such a situation could result in "organized chaos."

Below are the excerpts from the interview.

Q: Realistically, what can we expect from COP28 when it comes to our commitment to climate action and financing?

A: For many years, the oil & gas and energy industry were excluded from COP discussions. This year I would expect them to be central- not only oil & gas and energy companies but steel, aluminium, and transportation companies to be part of it- all laying out commitments and programs that we can get action on to reduce emissions.

It isn't about shutting down oil and gas, it is about harnessing the power of the oil and gas industry to do things like put up satellites. So this is going to be a very different COP.

Q: Oil prices are nearing $100 per barrel, what is your view on where prices could go from here?

A: There are a number of factors here, they have been creeping up and they have been moving up partly because there is a shortage, there is a lack of investment in the oil & gas industry. But a lot of it depends on whether there is slow growth or faster growth in China, as it has a lot to do with the oil prices right now. I think that's probably the major factor at the moment. Plus the economic activity in the US has picked up and the storage levels of crude oil in the United States is quite low. So I think that's the short-term impact on the price.

Q: Do you expect prices to go higher from here?

A: It's hard to say, some people around me are saying, that $100 a barrel is quite possible towards the end of the year. To me, again, it depends on the pace of Chinese growth, which could go either way. So I'm not really expecting them to rise much above where they are today.

Q: What about demand destruction? At $100 a barrel? This is a worry about demand destruction. Is that a concern for you?

A: I don't have much concern either way with the oil prices, I think there will be some demand destruction, just like there had been for natural gas prices last winter in Europe. But I think the world needs to have its heat, light and mobility, and it needs to have the energy to do that. I'm not so worried about demand destruction, because industrial activity is up in North America and it does seem to be up in China.

Q: Overall, how bullish are you on India? The World Bank has come out with its outlook predicting a 6.3% growth rate for India, they've said that India will be one of the fastest growing economies, one of the most resilient economies in the world, your outlook on how India is set to grow from here? How can it play a bigger role in global supply chains?

A: I've always been very bullish on the growth prospects for India, not only because of the great dynamism of the people, the demographics, the age, you've got young people and a much greater percentage in India than you do in China. You got really smart, energetic people. And I think the world is going to get difficult. So India, finding places that it can play into supply chains in the world, and probably hooking up with big companies to try to be part of their supply chain- in a way India is a neutral nation, in my view, so it's got a great advantage as well.

Q: Any areas you feel that India should work on to leverage that advantage- the China plus one strategy that many countries are coming up with?

A: I think each of the industries needs to pair and pick their markets and sometimes partnerships with big companies and government policy do allow that to happen. I think those are the things that would just keep it moving really fast. It is in pretty good shape right now I think. It's not going to be an overnight transition. My view is India knows what it needs to do, and it's doing it so I don't have a specific suggestion to jump-start it, just keep doing what you're doing and maybe do it faster.

First Published:Oct 4, 2023 9:18 PM IST