From UPSC perspective, the following things are important :
Prelims level : OPEC+
Mains level : India's oil import
India, the world’s third-biggest oil importer, has said that the decision by major producers to continue with output cuts as prices move higher could threaten the consumption led-recovery in some countries.
Try this PYQ:
Q.The term ‘West Texas Intermediate’, sometimes found in news, refers to a grade of
(a) Crude oil
(c) Rare earth elements
What is the news?
- The Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, agreed not to increase supply in April as they await a more substantial recovery in demand amid the COVID-19.
- Crude prices rose after the announcement and are up 33% this year (meanwhile India flaring up prices to 100 Rs/litres for Petrol).
What is OPEC+?
- The non-OPEC countries which export crude oil along with the 14 OPECs are termed as OPEC plus countries.
- OPEC plus countries include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan, and Sudan.
- Saudi and Russia, both have been at the heart of a three-year alliance of oil producers known as OPEC Plus — which now includes 11 OPEC members and 10 non-OPEC nations — that aims to shore up oil prices with production cuts.
Concerns for India
- Rising oil prices are posing fiscal challenges for India, where heavily-taxed retail fuel prices have touched record highs, threatening the demand-driven recovery.
- India imports about 84% of its oil and relies on West Asian supplies to meet over three-fifths of its demand.
- As one of the largest crude-consuming countries, India is concerned that such actions by producing countries have the potential to undermine consumption-led recovery.
- This would hurt consumers, especially in our price-sensitive market.