India to ally with China on ‘Asian premium’

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: Asian premium, OPEC, International Energy Forum

Mains level: India’s dependence on oil imports and various issues related to it


News

Against Asian premium

  1. India would coordinate with China and other Asian countries to raise voice against the “Asian premium” being charged by the Organisation of the Petroleum Exporting Countries (OPEC)
  2. India with China’s help will chalk out the strategy that would result in getting a better price from OPEC countries
  3. India had also raised the issue on the sidelines of International Energy Forum

Back2Basics

Asian premium

  1. Asia is far more dependent on oil imports from the Middle East (ME) than any other major importing region in the world
  2. Because of this dependence, it is widely believed that Asian customers have been paying a premium for the Middle East crude oil relative to those in the US and EU
  3. A number of studies have consistently identified higher prices for exports to Asia relative to US and EU prices
  4. This is called as “Asian premium”

Organisation of the Petroleum Exporting Countries (OPEC)

  1. OPEC  is an intergovernmental organization of 14 nations
  2. The 14 countries accounted for an estimated 44 percent of global oil production and 73 percent of the world’s “proven” oil reserves
  3. OPEC’s stated mission is “to coordinate and unify the petroleum policies of its member countries and ensure the stabilization of oil markets, in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry
  4. The OPEC Conference is the supreme authority of the organization and consists of delegations normally headed by the oil ministers of member countries
  5. The Conference ordinarily meets at the Vienna headquarters, at least twice a year and in additional extraordinary sessions when necessary
Oil and Gas Sector – HELP, Open Acreage Policy, etc.
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